Profitability index is one of the lesser-known financial investment residential property steps of return primarily since it commonly paves the way to it's more prominent 'kissing-cousin', web existing value (NPV).
Both methods use the element of time worth คอนโดมือสอง ราคาถูก and price cut a rental building's future capital to come to their existing value, than in turn weigh that worth versus the financier's first money investment.
The distinction between both methods is that net existing value finds the buck quantity distinction in between the affordable capital and initial money financial investment, whereas profitability index finds the proportion.
For instance, allow's state that you're mosting likely to initially spend $100,000 cash to get a rental residential property anticipated to create a profits stream with a present worth of $110,000. The NPV would certainly be $10,000 (the buck distinction); the productivity index, on the other hand, would be 1.10 (the ratio).
On the surface, of course, the index appears to merely supply another way to share the same result (which, in one sense, is rather real). Yet there's additionally a substantial distinction worth recognizing that can help you make more prudent financial investment choices.
Because the index is a ration, it's not conscious the quantity of the investment. Simply put, it informs you the percentage of bucks went back to bucks invested as opposed to the amount. So you're offered the benefit to quickly contrast the productivity for any type of number of property investment chances that need different first investments. Solution
Present Value of all Future Capital/ Preliminary Cash Financial investment
To make the estimation calls for the quantity of initial money financial investment (i.e., down payment, shutting prices, and so on), all the future profits generated by the residential property throughout a particular holding duration (e.g., five years), and an assigned price cut rate. That is, the rate of return you need to cover an opportunity price of resources, anticipated inflation over the holding period, as well as a costs for the threat related to the financial investment.
Afterward, all future profits are marked down at that price to establish their existing worth and then divided by the amount of the first investment. A sample is provided over from my iCalculator option (click to enlarge).
Right here's just how to translate your results.
An index of 1.0 ways you accomplished your preferred rate of return specifically An index more than 1.0 means that you've exceeded your objective An index much less than 1.0 means that you failed to attain your objective
ไม่มีความคิดเห็น:
แสดงความคิดเห็น