How to Run the Numbers?
Sorry I've read this so late in the thread - the advice that has never left us when we talked it through with a very wealthy friend of ours -
1. Be prepared to throw all the furniture and things out every so often, like every 2/3 years - people don't respect things as you do
2. Work on a minimum 8% return on the value of the property... so you need to work out all your costs - cleaning, laundry, taxes, maintainence, throwing out all that furniture every few years, advertising etc etc
3. Never chase money
4. Never drink before 6 p.m.
5. Don't be under funded.
All of the above words of advice have come true!
We have had to be ruthless this year after 4 years of lets... lots gone to the tip - chairs all sorts.
We are hitting a good return higher than the 8%.
We chased a business venture offered to us here in France and got our fingers burnt big time.... we were greedy... our fault and never again!
Well...... holidays & weekends if no changeovers it's OK!! But seriously I have watched people fail because the bottle comes out and they end up sitting around talking rubbish and not working.... I don't see that as a big issue so much in the States but certainly in parts of France, Spain etc there are a lot of hardened ex-pat drinking circles!
1. Be prepared to throw all the furniture and things out every so often, like every 2/3 years - people don't respect things as you do
2. Work on a minimum 8% return on the value of the property... so you need to work out all your costs - cleaning, laundry, taxes, maintainence, throwing out all that furniture every few years, advertising etc etc
3. Never chase money
4. Never drink before 6 p.m.
5. Don't be under funded.
All of the above words of advice have come true!
We have had to be ruthless this year after 4 years of lets... lots gone to the tip - chairs all sorts.
We are hitting a good return higher than the 8%.
We chased a business venture offered to us here in France and got our fingers burnt big time.... we were greedy... our fault and never again!
Well...... holidays & weekends if no changeovers it's OK!! But seriously I have watched people fail because the bottle comes out and they end up sitting around talking rubbish and not working.... I don't see that as a big issue so much in the States but certainly in parts of France, Spain etc there are a lot of hardened ex-pat drinking circles!
it's all a learning curve!
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Alan Knighting
- Posts: 4120
- Joined: Mon Oct 18, 2004 7:26 am
- Location: Monflanquin, Lot-et-Garonne, France
Tansy,
I think your friend has it just about "spot on". In mid-winter it comes as a timely reminder of what I am doing, how and why?
Yes, some people break all the guidelines but they are those who are running your favourite "coal-holes".
Yes, most of us break some of the guidelines some of the time but hopefully we get the wake-up call before it's too late.
Full time or part time, it's a business and it all has to add up or we shouldn't be doing it.
Alan
I think your friend has it just about "spot on". In mid-winter it comes as a timely reminder of what I am doing, how and why?
Yes, some people break all the guidelines but they are those who are running your favourite "coal-holes".
Yes, most of us break some of the guidelines some of the time but hopefully we get the wake-up call before it's too late.
Full time or part time, it's a business and it all has to add up or we shouldn't be doing it.
Alan
CNN Money
Is this what you are looking for:
http://money.cnn.com/2003/06/12/pf/your ... ney_july_/
http://money.cnn.com/2003/06/12/pf/your ... ney_july_/
Thanks for the info, it makes me feel like a very small fish in a whopping great ocean ,but hey, I can live with that ok, I understand and agree with 1, 3, & 5. (I like a wee bit before 6pm, so I can't agree theretansy wrote:2. Work on a minimum 8% return on the value of the property... so you need to work out all your costs - cleaning, laundry, taxes, maintainence, throwing out all that furniture every few years, advertising etc etc
)But I don't understand 2.
Does this mean that all your expenses should not be more than 8% of the total value of the house+land? Is that including taxes and mortgage?
I've read in Christine Karpanski's book that your mortgage should not be more per month than expect rent per week during peak--- with the idea that peak = 12 weeks, thus a full peak will pay the entire mortgage, and anything else pays the rest. Is the above sort of the same?
I'm so confused....
thanks!
jess
"Does this mean that all your expenses should not be more than 8% of the total value of the house+land? Is that including taxes and mortgage?"
Return on investment is the annual net income divided by the total investment.
8% is a yardstick return for commercial property investment. It does not factor in lifestyle, or owners accommodation.
Peter
Return on investment is the annual net income divided by the total investment.
8% is a yardstick return for commercial property investment. It does not factor in lifestyle, or owners accommodation.
Peter
