Here’s an example of some Property analysis Guidelines, make sure you’re comfortable with the Guidelines YOU use! Mike
Cap Rate = Net Operating Income/Purchase Price (Value)
Gross Rental Income (month)
NOI/month x 12 _____________NOI Annually
NOI/Purchase Price (Value) = Cap
3.Rate of Return
Net Income/Investment = RoR
4.Income Approach GRM
Monthly Rent/Value = GRM
(7%, 30yr Fixed, 20% down = $984.12/month PI)
There were 26 Sold Listings within 0.50 mile radius & within the past 6 months. $190-392k Average 903SF Average Sale $246,354.
$2500. monthly rent
-$453. Condo/HOA fee
-$169.62 RE Tax
-$250. Vacancy & Maintenance
$1627.38 NOI/month x 12 = $19,528.56 NOI/year
(Lower the Cap, Lower the risk, Higher the Cap, Higher the risk)
This is also the Guide we use in Lesson #5 “Make an Offer” of Mike Hurney’s course “How to Become a Real Estate Investor in 12 Simple Lessons”
Reserves – 3 months PITI
High FICO credit score
Low LTV Loan to Value
Good DTI Debt to Income ratio
Weekly Update 4/17/2020
Congress Missed a Chance to Protect Rentals. We Can’t Let it Happen Again!
All of us at National REIA hope you and your families are well. The COVID-19 outbreak is an enormous challenge to our communities and our nation. While Congress enacted far-reaching measures in response to the crisis, more needs to be done. Congress needs to pass additional relief measures for the rental housing industry and address a number of concerns in the recently passed CARES Act!
Consumer Price Index Down in March
The U.S. Bureau of Labor Statistics is reporting that the Consumer Price Index for All Urban Consumers (CPI-U) declined 0.4% in March, which BLS says was the largest monthly decline since January 2015.
Property Taxes on Single Family Homes Surpasses $306 Billion in 2019
According to ATTOM Data’s 2019 property tax analysis, total property taxes levied on single family homes in 2019 totaled $306.4 billion, up 1% from 2018. This figure averages to about $3,561 per home and is an effective tax rate of 1.14%.
Tarek El Moussa Says Flipping is Happening but it’s a lot More Challenging!
On a recent episode of CNBC’s Power Lunch, HGTV’s Tarek El Moussa said that flipping is in fact happening, but “it’s just a lot more challenging.” The reality TV star of Flip or Flop joined the panel to discuss the state of the real estate industry amid the Coronavirus pandemic.
Home Prices Were Heating Up Prior to the Coronavirus Outbreak
According to CoreLogic, home prices across the nation were beginning to “heat up” just prior to the Coronavirus outbreak and subsequent national emergency. Their latest CoreLogic Home Price Index (HPI) Report said that prices increased 4.1% year over year and has been increasing on a year-over-year basis since, 2012.
COVID-19 Impact on Short-Term Rentals
Do you have any short-term rental investments that have been affected by the Coronavirus? On a recent episode of Real Estate News for Investors, Kathy Fettke discusses the impact the pandemic has had on the short-term rental industry as well as what Airbnb has been doing to address it.
Redfin Sees Interest in Rural Areas & Small Towns Spike During Pandemic
Redfin says that small towns and rural areas may be set to boom in the wake of the Coronavirus pandemic as homebuyer interest in America’s less populous areas saw a surge in March.
Mortgage Loans in Forbearance Increases
The National Loans Website is reported an increase in requests for mortgage forbearance. This data is from the MBA’s latest Forbearance and Call Volume Survey which reported that the total number of loans in forbearance recently jumped from 2.73% to 3.74%.
April is Fair Housing Month
Infographic: April is Fair Housing Month, as designated by the U.S. Dept. of Housing and Urban Development. HUD says that any form of discrimination makes it difficult to create the nation our forefathers envisioned.
update April 3,2020 NewHampshireREIA.org
Congress Passes Historic Trillion Dollar Stimulus Package
In late March Congress passed (and the President signed) a historic $2 trillion economic-rescue package (CARES Act) for individuals and businesses affected by the Coronavirus pandemic. CNBC’s Kelly Evans interviewed the Wall Street Journal’s executive Washington editor, Gerald Seib about the bill and its implications for helping America through this crisis. Click here to read more.
Unemployment Claims Spike off the Charts
A recent “chart of the week” from the Mortgage Bankers Association vividly illustrates the U.S. Department of Labor unemployment statistics from mid-March: jobless claims spiked to over 3.3 million! Click here to read more.
FHFA Index Says U.S Home Prices Up 5.2% Year-Over-Year
According to the latest Federal Housing Finance Agency’s (FHFA) House Price Index (HPI), U.S. house prices were up 0.3% in January, 2020. In addition, they report that home prices were up 5.2% from January 2019 to January 2020. Click here to read more.
Pending Home Sales Up 2.4% in February
The National Association of Realtors is reporting that pending home sales were up 2.4% in February with the NAR’s Pending Home Sales Index (a forward-looking indicator based on contract signings) increasing to 111.5. Click here to read more.
FBI Sees Rise in Coronavirus Fraud Schemes
We have had several posts about the dangers of cybercrime over the past few years. Recently, the FBI said they have seen an uptick in the number of scams & methods for cyber-criminals to steal your money, personal information or both during the current Coronavirus pandemic. Click here to read more.
How Does a Crisis Affect Your Investment?
Managing your properties during any crisis is a challenge, let alone the current Coronavirus pandemic we’re experiencing. On a recent episode of the Rent Perfect Podcast, David Pickron talks with longtime property manager and seasoned housing provider Anne McCawley about how to manage your properties during a time of crisis. Anne gives great insight on how to plan for and maneuver through these challenging times. Click here to read more.
Negative Interest Hit US Treasury Bills
In late March yields on both the 1-month and 3-month U.S. Treasury Bills entered negative territory – the first time in almost 5 years that this has happened. Click here to read more.
ABODO Says Americans Worried About Making Rent
National apartment listing site ABODO recently reported that the median nationwide rent price for one-bedroom units in April was $1,088 with two-bedroom units coming in at $1,354. However they caution that Americans are worried about paying the rent during the ongoing Coronavirus pandemic. Click here to read more.
S&P CoreLogic Case-Shiller Index Up 3.8%
According to the latest S&P CoreLogic Case-Shiller Indices, covering all nine U.S. census divisions, the rate of home price increases reported a 3.9% annual gain in January. Their 10-City Composite annual increase came in at 2.6% and the 20-City Composite posted a 3.1% year-over-year gain. Click here to read more.
Breaking Down the $2 Trillion Coronavirus Stimulus Package
Infographic: In late March, the U.S. Congress passed and President Trump signed the $2 trillion Coronavirus relief bill known as the CARES Act. The folks over at howmuch.net recently put together a simple chart outlining where this money is going and how it will help America. Click here to read more.