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Property Education

Online Real Estate and Property Investing Courses, Seminars and Training

You don’t need a degree or to be a guru to be successful in property investing. You just need to know how real estate investing works and what are the rules. We give you all that. All the information investors would have loved to have before this last downturn.

Campus makes it possible for you to learn about property from the comfort of your office or home computer, anywhere, anytime, at your own pace.

Most property investing courses and workshops are now "Instant Access" and some scheduled throughout the year for your convenience. Seats are though limited for each course due to licensing of software. Make sure you book your courses well in advance to avoid disappointment.

With the purchase of any property investing course you get free one year access to Property Investor Network Forum.

For pricing visit the Property Investor Network Shop .

Calculate Property Investment Profits Before You Buy

As a property investor you will have to face various activities that sometimes can be challenging.

First you will have to find the deal that suits your needs and financial situation. Personal preference and circumstances are of high importance when buying an investment property. As we say on Property Investor Network, you should make your money when you buy, not when you sell. This is very important. The deal must be good for you at the time of purchase.

As we stress, over and over again, property investing is about calculating the numbers, not about the tiles, or the nice windows. Not even about the neighborhood. Though I am sure a lot of investors and particularity "emotional property investors" would love to argue the neighborhood subject.

Because of this, it stands to reason that one should buy as cheap as possible. Many investors ask what is cheap enough? Is R300,000 okay? Or maybe R500,000 or maybe one should go for the lowest prices in the worst places of R100,000.

The answer to this question is always shocking to beginners: it does not matter. In property investing, the price must be low enough to make returns. Some like to call this BMV – below market value. This also means that a property worth 1,000,000 may be able to make far more returns than a property worth 100,000. This is also the reason why the numbers need to be calculated to see if the price is right, not the price itself is what matters, but the returns that the property makes to the investor.

If the purchase of an investment property is correct and done by the numbers with correctly calculated returnd, one has to make every mistake in the book thereafter to get into a financial disaster. This is possible but it is not likely if the deal was correctly evaluated.

Because we keep getting these questions of what is the right price for an investment property is, we decided to make this small example.

Let’s say you bought a property that gives you R350 per month income, which means that the rental of the property covered your bond repayments and your taxes and rates (levy if it is in a body corporate).

For this deal, perhaps you are managing the property yourself to ensure that you are cash positive and alleviate the letting agents costs until the property affords you the 10% management.

The next essential task would be keeping track of the numbers in property investing. In the example above, just imagine what happens if you need to spend R1,500 for some repairs. This will put your monthly income back by some 4 months.

That said, if you purchased correctly and had maybe R500, R800 or even R1,000 profit per month, repairs would not set you back all that much.

That said, when looking at the numbers, you may find that investing in the property a further R15,000 will increase your rental per month by R800 or more. This would mean that you make more cash and you would return your investment in under 2 years. By then the rentals will have increased and you will be making even more profit.

As a response to articles like these, we always get the regular answer "you can’t find properties like this". Not only that this is not true in any market, but now is even less applicable because the sellers market in residential is in a downward trend (for avoiding the word "slump" because the high bubble prices are gone and so are the buyers with it).

In summary, what is the right price? The price that will make you income is the right price. This should include in your offer any discounts if you need to make further renovations to a property.

The exact amount offered on the property does not matter. What matters is that the price will give you some profits. Even if occasionally not much and even if some repairs may set you back slightly, you have to calculate all of the considerations and make sure you can sustain some repairs along the way.

Bottom line; like with all investment properties and all types of property investing, including commercial and residential: you need to do the numbers before you make the offer. Make budgets and keep track of the numbers in the entire period that you are holding the asset.

A warning note: once you start doing the numbers you may find yourself slightly depressed. Most of the properties that homeowners buy and estate agents say are good property investments, will not really be a good investment from a property investors perspective.

The calculation of numbers on a property will put a clear, unemotional perspective on what an investment property is, and also a perspective on how your financial future will look.

Once you learn how to calculate profits in property investing and understanding the numbers you are good to go.

There is no rocket science in this, just a bit of learning and then a lot of research to find the right property.

If you want to learn and understand how to calculate buy-to-let property deals you may also want to attend the Calculating Residential Buy-to-Let Investment Deals .

Comments
Add NewSearch
Andrew - Calculating Profits   | 196.37.134.xxx | 2009-01-02 03:24:37
Hi

As a beginner in property, I purchased my first residential flat poorly (negative cash flow). In this aritcle "Calculate Property Investment Profits before you buy", there is little mentioned on how much should be used as a "deposit". Obviously the higher the deposit the more likely you can get a positive cash flow. What do the experts say should be used and is it really possible to find a residential property that can give a positive cash flow after levy's and taxes and loan interest is paid?
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Copyright (C) 2007 Alain Georgette / Copyright (C) 2006 Frantisek Hliva. All rights reserved.





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Student Reviews

I really enjoyed the Calculating Residential Investment Deals course! It was very well constructed.

Overall I feel I grasped the main idea behind the course of how to work out and calculate a property to determine whether a property would be a good buy long term or in the short term, in real financial terms. Jason - Gary's Real Estate

 





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The calculating residential investment deals were really informative & easy to follow at a time that suites me. Being online meant one could always refer back if you missed anything or need for it to be explained again.  Very good in order to avoid burning you fingers when considering a new deal and making the right financial decisions. Steyn du Plessis - London




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I would like to thank you so much for putting this course together and making it available to the public.  I have been selling property for a number of years and I still learnt so much from this course!  It is invaluable.  I highly recommend any Estate Agent to take this course to enhance their property knowledge even further.  Gina Hamlyn (Property Broker) - GINA HAMLYN PROPERTIES, KZN




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As a relative newbie to the property market - from a purely investment point of view; I found the Calculating Residential Investment Deals course very informative and easy to follow.  I am wanting to get involved in the rental  / development market and feel that I am getting better equipped to do this as a result of learning and expanding my understanding. Joanne du Plessis





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I consider this course to be, easy to understand and to the point. Everyone should know this information when considering buying property. The information in the course is vitally important for any property investor, whether it is your own home or property for investment purposes. The voice used is clear and easy to follow. Okkie van Greunen - JHB





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Thank you for the Calculating Residential Investment Deals course. I found it helpful and informative. I would recommend it not only to beginners but also to experienced Estate Agents. Although I have many years of business experience and I was expecting the course to be basic and not worth the time and effort, categorically I was wrong, the basics were refreshing and well worth the time spent, but there were many ideas that where new to me. I am looking forward to continuing my education at the first opportunity. Bernard - Stilfontein





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