All Topics / General Property / Financial Analysis for Residential Investors?

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  • Profile photo of danniodannio
    Participant
    @danielroache
    Join Date: 2017
    Post Count: 2
    April 14, 2017 - 6:54 pm

    Hi Investors,

    I’ve noticed a lot of people going in to real estate without understanding a whole lot of the financials involved. Especially recently with the real estate growth in Australia.

    I’m a mathematician but I’m thinking of starting a financial analysis service to give investors all the metrics that business and commercial real estates use to evaluate investments. I don’t see why residential investors should have to invest without this kind of information. Things like Internal Rate of Return and Net Present Value, Debt vs Equity etc. Basically just maths stuff that can help people make stronger financial decisions and even back up their offers with solid investment fundamentals.

    I already have most of the analysis systems developed (done myself in the past) and could write reports up for people evaluating property investments.

    What do you guys think of this idea? Is that a service anyone would find useful?

    Cheers,
    Dan

    • This topic was modified 7 years, 6 months ago by Profile photo of dannio dannio.
    Profile photo of Ethan TimorEthan Timor
    Participant
    @ethantimor
    Join Date: 2016
    Post Count: 282
    April 16, 2017 - 9:56 pm

    Hey mate,

    I’m sure some people will find it useful.

    I’ve used plenty of formulas when I used to invest in shares. Still look at some ratios in real estate, when looking to compare apples to apples but here’s the kicker: from my experience, property isn’t just the present value. Far from it. One property might have better ratios but the other could be renovated and then the ratios of that one would be far superior. And that’s before looking at CG of each property. And is it flood prone? And what about the demand for that many beds in that suburb? Etc etc.

    hope this helps?

    Cheers,
    Ethan

    Ethan Timor | Aligned Finance Pty Ltd
    http://www.alignedfinance.com.au/
    Email Me | Phone Me

    Active Investor & Broker; Based in Northern NSW, servicing Australia wide; Author of '34 Proven Ways to Maximise Your Borrowing Power' (download free from our website)

    Profile photo of danniodannio
    Participant
    @danielroache
    Join Date: 2017
    Post Count: 2
    April 29, 2017 - 3:01 pm

    Hey Ethan,

    You’ve got a good point I neglected to mention. There’s a wide range of fundamentals to consider in the property itself and these effect the ratios and returns quite substantially. I guess from my background, I prefer to have a thorough look through the numbers and make conservative CG estimations which can vary quite a bit but that’s only one way to invest in Real Estate. There’s a lot of great approaches other investors use too.
    Thanks for the reply mate,

    Cheers
    Dan

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