One of the secrets of successful investing is a balanced and efficient portfolio. When investing, it is worth paying attention not only to the net annual profit, but also to the capital growth – how much each invested dollar has brought you in addition.
Let’s consider the mechanism for obtaining profitability using a generalized example of data from transactions made through OPISAS.
- Five properties were purchased
- Investment amount: $498,500
- Ownership period: 2014-2019
This calculation assumes zero rental growth, while in reality over the past five years it has amounted to 11%
Rental income: $61,080 per year, or 12.3% per annum
After paying taxes, insurance, interest to the management company and other payments, we get net rental income: $46,655, or 9.4% per annum