How do you know if a deal is a good deal?
There are many things to consider when analysing a potential real estate deal. In the Canadian Wealth Masters Buy-Rent-Hold Calculator are most of the hard factors to evaluate–costs and income. Neglecting some or even one of these factors can turn your deal from cash-flow positive to negative. Having a good calculator can be key to helping you significantly minimizing your risk.
Cost factors include:
- Mortgage/Financing Payments
Income factors include:
- Other Rent (i.e. garage, parking, storage)
This calculator will help you determine how much money will be required to enter the deal, potential exit strategies, and your return on investment.
Note: There are many factors involved in a real estate deal and not everything can be included in this spreadsheet. Some factors such as desirability of the neighbourhood and rental market are more soft costs that needs to considered by the investor. As in any investment, real estate investments are a risk; although we consider real estate investments much less risk than others, it is up to the investor to do their due diligence when analysing a deal. Here is one tool that can really help.
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