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Showing posts from June, 2020

Evaluating buy and hold investment returns in real estate

Welcome to the second post in the series of evaluating real estate deals. You can see the previous post that discusses what are the sources of return  here . Today we will learn how to know if the investment is a good investment looking at its returns.  This is not a comprehensive 'how to analyze deals' post. People could write whole books on this topic. Instead we will take a look at some basics of investment returns. I will explain the following terms: Cashflow ROI ROE and teach you how can you can use them when evaluating real estate in the Irish real estate market. Cashflow Are you left with cash (or money in the bank) after all the expenses and taxes are paid? Then you have positive cashflow. If the mortgage payments, expenses and taxes together are higher than the income, then the cashflow is negative. You have to send additional money to keep your property afloat. Is negative cashflow a problem?  It doesn't have to be - because you can make great deals that have nega