I for 41 plus years rarely seen the right price. Several people could be buying the same property and the right price could be any of 15 different figures. It all depends on several things. There are four things in a contract that are interrelated with each other.
1. Price
2. Down payment
3. Interest rate
4. Time period
The terms with items 1-4 play a big role in finding the right price.
Pre 2021 going back when rates were very low, investors were tossing out the window the APOD, they were basing EVERYTHING on interest rates which will come back to haunt them.
Your agent's role is to "try" to get the data from the APOD, you know from previous posts that I love the data.
Its a must to get the facts about the property because it will affect the value and use of the property, avoiding misleading data could destroy the purchase. Google Gross Rent Multiplier, Net Rent Multiplier, and Net Operating income.
The APOD
In the video shown below, listen to what I feel is the most valued thing rental owners and rental buyers need to understand, the APOD.
The APOD, when used correctly, will add value to your rentals. Too many people, when money was free, overlooked everything in the APOD, they only focused on DS or debt service and ignoring everything else in the APOD, the results can be devastating and real estate agents should educate themselves and buyers on the APOD, otherwise they are messing with the future of someone elses so called investment.
Real estate IS NOT A MONEY MAKER FOR vacations, food or personal things. It's for equity growth and write off's. The fastest way to become a slumlord is to suck the money out of the property.
Start 6:05 into the video to understand that
real estate is not an income business.
Its an appreciation business or equity growth
NOI
Your Net Operating Income is the most important part of the APOD formula. Scary if bubble buyers did their purchases based on interest rates alone.
So, when you work with an agent when buying real estate, be sure they understand the APOD.
Seasoned Broker 41+ yrsI'm an UnTraditionalBroker.com in an
alternative real estate marketing world. Texting is best 435-753-4577.
If your home has expired from the MLS, no longer on the market, I have alternative marketing strategies that are DATA driven when selling your property....
You Should Never Deny
A Strategy / An Opportunity / And Several Options
Before Checking Things Out!
If your property is currently listed with a Brokerage, please disregard my offers. It is not my intention to solicit the offerings of other realtors you may be working with through an agency relationship agreement. I will be happy to work with them and cooperate fully.
