this is not an one number game. You'd better use a matrix to measure.
Besides profitability, you cannot ignore liquidity and solvency. They are equally important.
to calculate profitability, you have to take all parameters into considerating, which include, but not limited to:
Property appreciation rate (or depreciation rate which could be more reasonable if treated like a consumable commodity)
Inflation rate
Mortgage interest
Rent yearly grow rate
Alternative investment return rate
......
Based on the current economic situation, 6% is ok provided that both liquidity and solvency are good. Otherwise, it's a headache because you cannot squeeze profitability anymore
think globally, invest locally
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What is good liquidity defined?
-CirrusCloud-
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05/21/2010 postreply
13:23:46
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回复:What is good liquidity defined? (图)
-槑-
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05/21/2010 postreply
14:04:13
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buying an old house could be profitable, but risky
-槑-
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05/21/2010 postreply
14:32:43
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Thanks a lot!!! I'll study your posts more later.
-CirrusCloud-
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05/21/2010 postreply
15:47:04
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回复:think globally, invest locally
-qiaoshe-
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05/21/2010 postreply
18:29:30
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如果是return on capital,6%还行。return on capital 不同于 return on invest
-槑-
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05/22/2010 postreply
05:01:29
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回复:如果是return on capital,6%还行。return on capital 不同于 return on inv
-qiaoshe-
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05/22/2010 postreply
07:59:46