Guest article: How to maximize your Real Estate Investment Total Return

Based on 36 years in real estate and 700+ escrows focusing on investment returns, I would say 80 – 90% of investors focus on cash flow (or income-focused investing) and 10-20% focus on appreciation (capital gains-focused investing). The only types of real estate I have not invested in are hotels and motels.

Income-focused investing, simplified

Cash on cash returns are basically the cash left over at the end of the calendar year as a percent of your down payment. Over the years, As an investorA purchaser who holds a property long-term on a buy-to-let basis as an income-producing investment. Contrast with a speculator who buys-to-flip a property for fast profits, rather than annual income., I have experienced returns that range from negative to over 40% ! Now let’s say an investorA purchaser who holds a property long-term on a buy-to-let basis as an income-producing investment. Contrast with a speculator who buys-to-flip a property for fast profits, rather than annual income. receives 40% return for 10 years. Starting with a $1 million building (80% loan-to-value ratioA ratio representing the outstanding loan balances versus the current fair market value of the mortgaged property. (LTV)) in 10 years the capital gains will be approximately $333,333 based on a 6% selling cap rate.