Return on Investment - ROI
When computing potential returns on investments in real estate, with what assumptions should I be concerned?
When you are analyzing any real estate deal, you need to concern yourself about your assumptions, such as what you believe is the value of the property, and what the market says the property is worth. You can review a bank appraiser’s appraisal, but ultimately a buyer and a seller determine a property’s final price or value. So you should underestimate a house’s value when analyzing possible return models.