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  1. #1
    Registered User Semi Pro Member
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    267

    What numbers do you look for when investing in real estate for income?

    Are there other metrics besides the CAP rate and GRM when buying income producing property such as an apartment building or office property?


  2. What numbers do you look for when investing in real estate for income?
  3. #2
    Registered User Semi Pro Member
    Posts
    282
    The DCR is an important factor to look at. You really want to get a property whereby the financing yields a DCR of at least 1.20, This means your Net Operating Income (NOI) has to be at least 20% greater than your debt service.

  4. #3
    Registered User Pro Member
    Posts
    553
    You have to also consider the effective life of the cooling and heating systems, roof, plumbing, electrical, flooring. These must be taken into consideration along with property taxes and insurance. Texas has some very hgh taxes so while the price might be low and rental income high, the 2-3% property taxes can eat up a lot of that income.

  5. #4
    Registered User Semi Pro Member
    Posts
    270
    You may want to check out this discussion about investing rules for rental property. It may be a lifesaver and keep you out of getting into a bad deal.

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