Understand Your Area Series: What is the Profit Expectation in this Area?
Profit is a key word in any business. To Founder/Managing Partner Lamar Hunt, Jr., thinking about the potential profit when buying a home is at the top of his list. “After we have found an area we are interested in, we look at what the acquisition costs are likely to be. To that number, we add the projected repair costs along with any miscellaneous costs and fees and get a total after-repaired cost. Then, we look at the projected rents a home may bring and using that, this gives us our return on investment.” Crunching the numbers is a task best accomplished before you are committed to buying a property. “It’s real easy to fool yourself about the projected rents when you are looking at buying a property. Also, it is very common to underestimate the repairs needed. So, set yourself some highs, mediums and lows for all these numbers. Then look at the worst case scenario, the average scenario and the best case scenario. This exercise will give you a clear perspective on what type of deal you are getting into,” says Lamar Hunt, Jr. For more great tips, see our blog at http://lorettoproperties.com/. Also, you can call 913-236-2902 if you have a home to sell.