Calculate and compare to other investments
When you invest in residential property, you’ll be doing so with the aim of profiting either from capital appreciation or rental income. The biggest mistake that beginner investors make is not being targeted enough in their objectives. Instead of working out their return and understanding their cash flow, they fall in love with a property and end up hoping to get some income from rent and make some money from capital appreciation.
In this post I’ll explain why investing for capital appreciation alone is a fool’s game. You’ll also learn the basic method of calculating your real rental return.