Dallas Real Estate: Newly Licensed Real Estate Agents
Posted Mar 6, 2007 @ 1:53 am, Viewed by 615 Visitors, Read 617 Times.Almost every successful business owes that success to careful planning and budgeting. Knowing your personal and business expenses, as well as planning your marketing activities to produce your desired income is an extremely important budgeting activity. Revisit your plan regularly and make changes if necessary, then follow it.
Here's How:
1. As a self-empolyed independent contractor, you first need to know your personal expenses to maintain your lifestyle. By spreadsheeting these expenses and even seasonalizing them if necessary, you will be able to better determine what you need to do in your business to generate the necessary income.
2. Once we know what we need for income personally, then a budget for our real estate business can be calculated. This takes into account expenditures for marketing and the expected results from it, as well as a seasonal breakdown. Here we need to be realistic with our expectations for income that will be generated by our various marketing activities. One approach is the sales funnel, so named because we're estimating income out the bottom of a funnel for prospects coming in by type of marketing.
How To Calculate Net Operating Income for a Real Estate Investment Property
Net operating income is the monetary result of subtracting operating expenses from Gross Operating Income. Gross operating income is that income after deductions for vacancy and credit loss for a rental real estate investment property.
Net operating income is the monetary result of subtracting operating expenses from Gross Operating Income. Gross operating income is that income after deductions for vacancy and credit loss for a rental real estate investment property.
How To Calculate Vacancy and Credit Loss in Real Estate Investing
Vacancy and credit loss is the estimated dollar amount of lost rental income due to vacant units and non-payment of rent.
Vacancy and credit loss is the estimated dollar amount of lost rental income due to vacant units and non-payment of rent.
How To Determine Expenses and Plan Marketing Activity for Profits in Real Estate
As a real estate agent or broker, you're an independent contractor. Expenses and income for your business should be estimated carefully and a plan put in place to create the income to surpass expenses. With spreadsheets and the sales funnel process, it's not difficult and well worth a couple of hours of your time.
As a real estate agent or broker, you're an independent contractor. Expenses and income for your business should be estimated carefully and a plan put in place to create the income to surpass expenses. With spreadsheets and the sales funnel process, it's not difficult and well worth a couple of hours of your time.
How To Calculate Gross Potential (GPI) Income
This is an easy calculation of the expected gross revenues from an income property. For rentals, the monthly or annual rents for all the units is totaled. No losses for vacancy or non-payment are considered. In other words, the property is considered fully occupied with all payments collected.
This is an easy calculation of the expected gross revenues from an income property. For rentals, the monthly or annual rents for all the units is totaled. No losses for vacancy or non-payment are considered. In other words, the property is considered fully occupied with all payments collected.
How To Calculate Percentage of Profit
When a property is purchased and resold at a profit, this calculation will yield the percentage of profit based on purchase price. If you're working with real estate investors, this is one calculation they like you to know.
When a property is purchased and resold at a profit, this calculation will yield the percentage of profit based on purchase price. If you're working with real estate investors, this is one calculation they like you to know.
How To Calculate Compound Interest
Compound interest is interest on principal plus interest on the accumulated interest. Real estate investing requires a knowledge of how compound interest is calculated.
Compound interest is interest on principal plus interest on the accumulated interest. Real estate investing requires a knowledge of how compound interest is calculated.
How To Calculate the Loan to Value (LTV) Ratio of a Real Estate Property
When working with real estate clients, agents and brokers are frequently tasked to help buyers to determine what they can afford in a home. One of the factors is the size of the mortgage they can get. The loan to value ratio is the percentage of a property's value that is mortgaged. Lenders will make mortgages based on maximum loan to value for different types of properties.
When working with real estate clients, agents and brokers are frequently tasked to help buyers to determine what they can afford in a home. One of the factors is the size of the mortgage they can get. The loan to value ratio is the percentage of a property's value that is mortgaged. Lenders will make mortgages based on maximum loan to value for different types of properties.
How To Calculate Capitalization Rate for Real Estate
For an income property that sold recently, you would divide the net operating income by the sold price to determine the capitalization rate. This percentage number could then be used to determine the value of another property if you know it's net income.
For an income property that sold recently, you would divide the net operating income by the sold price to determine the capitalization rate. This percentage number could then be used to determine the value of another property if you know it's net income.
How To Help Your Client Justify an Income Property Purchase Price Using Cap Rate
Using the asking price of an income producing property and the capitalization rate of other similar properties in the area, one can calculate the income necessary to justify the asking price.
Using the asking price of an income producing property and the capitalization rate of other similar properties in the area, one can calculate the income necessary to justify the asking price.
How To Determine an Income Property's Value Using Capitalization Rate
If the net operating income of a property is known, and it is divided by the capitalization rate for similar properties, the approximate current value of the property will be determined.
If the net operating income of a property is known, and it is divided by the capitalization rate for similar properties, the approximate current value of the property will be determined.
How To Calculate Gross Operating Income (G0I)
In real estate investment, we want to estimate the income of a property with a realistic estimate of losses due to vacancy and bad credit. We subtract those estimated amounts from Gross Projected Income to arrive at Gross Operating Income.
In real estate investment, we want to estimate the income of a property with a realistic estimate of losses due to vacancy and bad credit. We subtract those estimated amounts from Gross Projected Income to arrive at Gross Operating Income.
How To Calculate and Use the Gross Rental Multiplier (GRM)
Gross Rent Multiplier (GRM) is a tool used to assess the approximate value of a rental property by comparing its rental income with other like properties.
Gross Rent Multiplier (GRM) is a tool used to assess the approximate value of a rental property by comparing its rental income with other like properties.
How To Calculate Simple Interest
The formula and method, using principal amount, rate and time, for the calculation of simple interest. Used frequently by those in real estate investing.
The formula and method, using principal amount, rate and time, for the calculation of simple interest. Used frequently by those in real estate investing.
How To Calculate Cash Flow After Taxes (CFAT) for Your Real Estate Investor Clients
Once the cash flow before taxes is calculated (learn how here), we can then subtract the tax liability for the resulting real estate investment property cash flow after taxes. Real estate investors want to be able to calculate cash flow after taxes for rental properties.
Once the cash flow before taxes is calculated (learn how here), we can then subtract the tax liability for the resulting real estate investment property cash flow after taxes. Real estate investors want to be able to calculate cash flow after taxes for rental properties.
How To Calculate Cash Flow Before Taxes (CFBT) for Your Real Estate Investor Clients
Cash flow is all the in and out flows of cash through a business, without regard to tax considerations. All money in or out is considered. The cash flow of a real estate investment is an important part of its viability as an investment. Rental properties are expected to cash flow more than mortgage payments and expenses to generate a profit. James Kimmons
Cash flow is all the in and out flows of cash through a business, without regard to tax considerations. All money in or out is considered. The cash flow of a real estate investment is an important part of its viability as an investment. Rental properties are expected to cash flow more than mortgage payments and expenses to generate a profit. James Kimmons
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