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Randy Dodd's Blog

By Randy Dodd | Agent in Abilene, TX

Five Answers Needed For Investing in Real Estate - (3) Your Net Operating Income

Five Answers Needed For Investing in Real Estate - (3) Your Net Operating Income
Building Personal Wealth in Real Estate
Building Personal Wealth in Abilene Texas

By the time you get to determining your net operating you will have noticed there is some homework, research and digging to do for investing in real estate. Especially if you want to be successful long term.
Lets recap; You determined you Income Potential, you did the math to find out the best estimate of operating expenses that you could come up with. Now you can determine your (NOI) Net Operating Income. This number is very important because your offer price will be relevant to this number.

To calculate it; simple subtract known expenses from income. Hopefully you come up with a positive number, in most cases the higher the better.

SLOW DOWN! Don't Go Rushing Off Like Some Television House Flipper with your hair on fire ready to BUY your first real estate investment. You need to remember this number does NOT include your loan payment (if you have one) also the interest rate you will be paying.

In other words: You see the rainbow with a pot of gold under it? You don't get to keep all the gold.

Randy Dodd, Realtor, ePro, GRI, TAHS
Licence # 0583833

Rosanna's Realty
2301 Barrow Abilene Texas 79605
(325) 692-5275 Office
(325) 692-5277 Fax
(325) 733-4405 Cell Phone

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