Foreign Investment
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Real estate investment information for the global investor. Many countries allow foreign investment in one form or another. Find economic, legal, tax and immigration issues relative to foreign investment in Australia, Canada, Mexico, New Zealand and the United States. Education is your best defense against poor business practices and lack of disclosure.
Real Estate Investment Analysis
The Use of Leverage is a time honored method for increasing the rate of return on your invested dollar. The Investment Analysis Worksheet below compares the estimated rate of return for a $200,000 rental property using All Cash, a 50% loan and a 90% loan. Real estate investment analysis does not show estimated tax liability, tax advantages or principle reduction. All real estate transactions should be reviewed for tax and legal implications.
Leverage benefits include a "Potential" increased rate of return on your invested dollar.
Disadvantages include a higher risk factor and a negative cash flow.
You can only fool yourself by over estimating the appreciation factor and income while under estimating your vacancy factor and expenses. This Investment Analysis can be a handy tool when considering your real estate investment. Real Estate Investment Analysis is available as Excel Worksheet with all the formulas for FREE. Plug in your own purchase price, loan and expense information for instant purchase analysis. Program requirements: 97/98 Microsoft Excel or newer. Mac/PC compatible.
| Investment Analysis |
All Cash |
50% Financing |
90% Financing |
| Sales Price |
200,000.00 |
200,000.00 |
200,000.00 |
| Down Payment |
200,000.00 |
100,000.00 |
20,000.00 |
| Estimated Closing Costs (8%) |
16,000.00 |
16,000.00 |
16,000.00 |
| Total Cash For Closing |
216,000.00 |
116,000.00 |
36,000.00 |
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| Loan Amount |
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100,000.00 |
180,000.00 |
| Rate |
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7.50 |
7.50 |
| Term |
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30.00 |
30.00 |
| Monthly Payment |
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(694.87) |
(1,250.77) |
| Estimated Income & Expense |
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| Monthly Income Potential |
900.00 |
900.00 |
900.00 |
| Annual Income Potential |
10,800.00 |
10,800.00 |
10,800.00 |
| Less: Vacancy Allowance (30%) |
3,240.00 |
3,240.00 |
3,240.00 |
| Gross Annual Operating Income |
7,560.00 |
7,560.00 |
7,560.00 |
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| Annual Operating Expenses |
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| Property Taxes |
200.00 |
200.00 |
200.00 |
| Insurance |
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| Utilities |
1,200.00 |
1,200.00 |
1,200.00 |
| Services |
600.00 |
600.00 |
600.00 |
| Repairs |
300.00 |
300.00 |
300.00 |
| Reserve For Replacement |
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| Management (15%) |
1,134.00 |
1,134.00 |
1,134.00 |
| Association Fees |
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| Other |
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| Other |
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| Total Operating Expenses |
3,434.00 |
3,434.00 |
3,434.00 |
| Potential Net Operating Income |
4,126.00 |
4,126.00 |
4,126.00 |
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| Less: Debt Service |
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(8,338.46) |
(15,009.23) |
| Potential Cash Flow |
4,126.00 |
(4,212.46) |
(10,883.23) |
| Plus Appreciation Potential (10%) |
20,000.00 |
20,000.00 |
20,000.00 |
| Annual Earnings Potential |
24,126.00 |
15,787.54 |
9,116.77 |
| Estimated Annual Rate Of Return |
11.17% |
13.61% |
25.32% |
Estimated annual return does not include potential tax liability, principle reduction or possible tax savings. Sale of property may cause a taxable event which may lower the overall rate of return.
Real Estate investment information for the global real estate investor is provided by Bruce Woodworth. It is highly recommended that you seek the advice of licensed professionals when considering the many aspects of a foreign real estate investment.
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