{"id":1440,"date":"2016-01-23T16:06:07","date_gmt":"2016-01-23T08:06:07","guid":{"rendered":"http:\/\/people.utm.my\/noorsidi\/?p=1440"},"modified":"2016-01-23T16:06:07","modified_gmt":"2016-01-23T08:06:07","slug":"13-tips-for-maximising-your-profit-when-renovating-in-the-current-market-12","status":"publish","type":"post","link":"https:\/\/people.utm.my\/noorsidi\/2016\/01\/23\/13-tips-for-maximising-your-profit-when-renovating-in-the-current-market-12\/","title":{"rendered":"13 Tips For Maximising Your Profit When Renovating In The Current Market"},"content":{"rendered":"

12. Calculate the return on investment (ROI)<\/strong><\/p>\n

The ROI is the total profit after considering tax, divided by the total amount of money you put into the deal, calculated as a percentage. The money you put into the deal consists of:<\/p>\n

\n\u00bb Entry costs
\n\u00bb Renovation costs
\n\u00bb Holding costs<\/div>\n

The net profit is the sale price minus exit costs and tax. The ROI is the after-tax profit divided by the money you put into the deal as a percentage.<\/p>\n

For example, a $400,000 property purchased with an 80% loanto- value ratio might have entry costs of $100,000 (don\u2019t forget your own time). The renovation and holding costs might total $50,000 (don\u2019t forget your own time). So the total investment is $150,000.<\/p>\n

If the sale value is $525,000, then the gross gain before exit costs and tax would be $125,000 ($525k minus $400k).<\/p>\n

Subtract from this the reno and holding costs and you have $75,000. However, the exit costs might be $12,000, leaving you with a net gain of $63,000.<\/p>\n

Assume the property was flipped within 12 months, at a marginal tax rate of 30%, and you\u2019re left with $44,100 in hand after tax. That means your ROI is 29.4% ($44,100 divided by $150,000 as a percentage).<\/p>\n

If your marginal tax rate is 30 cents in the dollar, it\u2019s unlikely a part-time job would earn you $44k over the project timeframe. And a 30% ROI is better than money in the bank. But is it the best investment you can do?<\/p>\n","protected":false},"excerpt":{"rendered":"

12. Calculate the return on investment (ROI) The ROI is the total profit after considering tax, divided by the total amount of money you put into the deal, calculated as a percentage. The money you put into the deal consists of: \u00bb Entry costs \u00bb Renovation costs \u00bb Holding costs The net profit is the … <\/p>\n

Continue reading “13 Tips For Maximising Your Profit When Renovating In The Current Market”<\/span><\/a><\/p>\n","protected":false},"author":18926,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1440","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/people.utm.my\/noorsidi\/wp-json\/wp\/v2\/posts\/1440","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/people.utm.my\/noorsidi\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/people.utm.my\/noorsidi\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/people.utm.my\/noorsidi\/wp-json\/wp\/v2\/users\/18926"}],"replies":[{"embeddable":true,"href":"https:\/\/people.utm.my\/noorsidi\/wp-json\/wp\/v2\/comments?post=1440"}],"version-history":[{"count":0,"href":"https:\/\/people.utm.my\/noorsidi\/wp-json\/wp\/v2\/posts\/1440\/revisions"}],"wp:attachment":[{"href":"https:\/\/people.utm.my\/noorsidi\/wp-json\/wp\/v2\/media?parent=1440"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/people.utm.my\/noorsidi\/wp-json\/wp\/v2\/categories?post=1440"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/people.utm.my\/noorsidi\/wp-json\/wp\/v2\/tags?post=1440"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}