Frugal Trader was kind enough to publish a most informative post that I wrote at Million Dollar Journey, one which is extremely important. It’s called Landlord Math – Cap Rate and Return On Investment. I don’t imagine how people invest without knowing this kind of information but people do. Some even do very well. Certain investors have an intuitive understanding of the property business.
There’s a difference between intuitive understanding and cognitive understanding. One is reproducible and can be taught to other people. I love the scientific process and proper analysis. Let’s face it, buying a property is awesome and exciting. It speaks to the hunter in all of us. It’s not all fun and games and that’s where the analysis comes to balance the emotional. Caveat Emptor has never been more true.
I have read the Real Estate Investment Network’s series of books by Don Campbell and there is a lot of great information if you can stomach the anecdotal way in which the story is told. Give me my data without a bunch of hokey pokey.
John T Reed’s view of Real Estate Guru’s and their wares is very good as well. It is based in the USA but lots of those gurus come up here to visit the CN Tower and also give seminars. Basically if your guru is from the USA it’s a waste of money and time. Our real estate market is too different. Still it’s food for thought.
My thinking is to be careful, we may be in a bubble and that is a time to be careful. Fundamental analysis of the income property is essential to long term success.