per month on your rental property, multiply it by 12 months a year, and your investment gain will be $6,000.
• Add up all your operating expenses. This should include taxes, insurance, repair costs, and any other expenses you know or think you might have. If you pay $1,200 in taxes, $450 for insurance, and $900 in repairs, your total expenses would be $2,550.
• Subtract your expenses from your investment gain: $6,000 - $2,550 = $3,450.
• Divide the figure from step three by the price of your investment. So, if you bought the property for $75,000, then $3,450 ÷ $75,000 = .046 • Finally, turn the figure from step four into a percentage. In this case, 4.5%. This number is your ROI. You need to know what your bottom line is, i.e., how much you want to spend and what your ROI should be. If the price of buying and/or fixing up the property is too high and/or the ROI is too low, it’s time to move on and find another property that better fits your goals. BUY IN A MARKET THAT IS STABLE AND IS GO LE AND IS GOING TO GROW! What markets are safe and will probably grow? How about a town with a steel mill or a coal mine - NO WAY!
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