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  • Answer Upon - Real Estate Investing Tips On The 4 Ways You Can Profit- Do You Know Your Real Estate Mathematics?

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    0 a couple years ago with a down payment of $10,000 and now it's worth $120,000. The appreciation is $20,000, or $10,000 per year.

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    Profit is the main reason we invest in real estate so it's important to understand how and where your profits come from. We'll call this the mathematics of real estate profits. The four basic ways you will profit from real estate are:

    1. Appreciation
    2. Principal Reduction
    3. Tax Deductions
    4. Cash Flow

    Appreciation - Calculating your return on investment (ROI):

    We can calculate the appreciation in the value of the property over time in dollars or as a percentage of the cost. Let's say you bought a house for $100,000 a couple years ago with a down payment of $10,000 and now it's worth $120,000. The appreciation is $20,000, or $10,000 per year.

    Since

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    mathematics of real estate profits. The four basic ways you will profit from real estate are:

    1. Appreciation
    2. Principal Reduction
    3. Tax Deductions
    4. Cash Flow

    Appreciation - Calculating your return on investment (ROI):

    We can calculate the appreciation in the value of the property over time in dollars or as a percentage of the cost. Let's say you bought a house for $100,000 a couple years ago with a down payment of $10,000 and now it's worth $120,000. The appreciation is $20,000, or $10,000 per year.

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    on
    3. Tax Deductions
    4. Cash Flow

    Appreciation - Calculating your return on investment (ROI):

    We can calculate the appreciation in the value of the property over time in dollars or as a percentage of the cost. Let's say you bought a house for $100,000 a couple years ago with a down payment of $10,000 and now it's worth $120,000. The appreciation is $20,000, or $10,000 per year.

    Sinc

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    te the appreciation in the value of the property over time in dollars or as a percentage of the cost. Let's say you bought a house for $100,000 a couple years ago with a down payment of $10,000 and now it's worth $120,000. The appreciation is $20,000, or $10,000 per year.

    Sinc

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    0 a couple years ago with a down payment of $10,000 and now it's worth $120,000. The appreciation is $20,000, or $10,000 per year.

    Since $20,000 is our appreciation amount over two years we divide it by two to get an average annual appreciation of 10% based on the original property cost. The ROI is the percentage of profit you have earned based on the down payment you made. We divide the appreciation amount of $20,000 by the down payment amount of $10,000, showing that you return on your investment from appreciation is 200%.

    Principal Reduction:

    Principal reduction is the amount of your mortgage that has been paid off. A small part of your mortgage payment goes toward payin

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