All Forum Posts by: Anjana Vakil

@Brandon Hall Thanks for the input! I think you perfectly expressed the goal I didn't know I had (as @Gilbert Dominguez pointed out, it probably wasn't clear in my original post): my goal is to determine if it makes sense to keep the rental property, or sell and reinvest the money elsewhere. I hadn't really thought much about refinancing but it sounds like that might be a good way to go, sort of a best-of-both-worlds scenario.

@Gilbert Dominguez Thanks for your tips. If I do determine that it makes sense to hold on to the property, I'll look at ways to improve the cash flow. Talking to a realtor is a good idea, I should probably do that no matter what. 

Thanks again for the advice everyone! I'll keep you posted (ha!) when I crunch the numbers and figure out whether the property is a keeper or not.

@Fay Chen Ah OK that clears it up, and that's what I had understood previously, that commercial properties are 5 or more units. Thanks again!

Thanks very much for the clarification @Fay Chen. I've seen cap rate used as a metric for comparing different potential purchases apples-to-apples as you say, independent of the financing terms (which would affect COC but not cap rate, if I'm not mistaken). ROE is a new one to me but it definitely sounds like a good number to look at for this type of situation.

I also didn't realize that there was a difference between 3- and 4-unit properties in that sense. Actually, it had previously been divided into 4 units, but for the past several years two of those have been rented out as a single unit.  I've been wondering is whether it would make more sense to separate them again - in addition to looking into the legal details, sounds like I also need to do some homework on how it would affect how the property is valued.

Thanks again for the tips!

Thanks for the tips!

@Michael Noto Good points, and definitely ones that have been on my mind. The property has been well maintained, but I'm pretty sure that it could be bringing in more rent - one unit could even be split into two relatively easily, which I think would increase the rent substantially. But for now I guess I'm just trying to establish a baseline.

@Fay Chen Thanks for your suggestions - I hadn't thought of deducting the selling costs but that definitely makes sense to me. One question, could you explain what you mean when you say in point 1: "But since it's 3-unit, I'm not sure how much this will help you"? Maybe I'm revealing my ignorance here but I didn't get it - do you mean that this approach would work better for a single-family or something like that?

Disclaimer: I'm a newbie, just learning the ropes here :) Apologies if these are "stupid" questions, but after some fruitless BP searching I have to ask for some help...

I love all the resources on BP for learning how to evaluate a potential investment property before you buy. But does anyone have guidance for how to analyze a rental property that you already possess or have inherited, to determine how much sense it makes to hold on to it, vs. trying to sell it? How similar/different is this kind of analysis to what one would run on a potential investment property?

My family owns a 3-unit rental property, bought decades ago and currently owned free & clear. As far as my generation (who will inherit it eventually) is concerned, no cash has been invested, so the cash-on-cash return would be essentially infinite (right?), and therefore seems like a useless figure. Does it makes any sense to calculate the cap rate based on the original purchase price back in the day (1985)? Or should I be basing it on the most recent tax assessment, estimated market value based on similar properties, ...? Or are there some entirely different number(s) I should be looking at?

Thanks in advance for any advice you guys can give me!

Good point, @Naveen Desai ! :)

@Jason Tham Thanks for the encouraging advice! I think my situation will be similar to yours: I'll begin investing in the US when I move back there next year, and if/when I end up moving back overseas down the line, I'll have a local network built up by that time. Personally I'm not sure I'd be comfortable investing from abroad in a place I've never lived or that I don't know well, although with the strategy you recommend I'm sure even that is doable. Anyway it's great to know that there are people out there successfully investing from far off lands, so thanks again! :)

@Tim Uittenbroek    @Maarten Stevens   @Jason Tham and anyone else on this thread with experience investing in a different country than where you live: I for one would love to hear your experiences with overseas investing! How often do you find you need to physically go to the area(s) where you invest? Assuming it's not very often, how do you manage to keep your local network current from abroad?

Yeah Vietnam is wonderful! Personally I found Hanoi a bit too hectic, and from what I hear it has only gotten more so in the few years since I left - so much growth, so fast - and the city is bursting at the seams. If I ever went back it would probably be to HCMC instead: so much more to do and much better weather! No idea what it's like to own property in VN as a foreigner, but I'd guess that for a small-time investor it's more hassle than it's worth. 

Thanks @Frankie Woods ! I see you also invest in small multifamilies, I'll look forward to reading your blog as I'm sure it has some valuable info :)

@James M. Interesting ideas. I don't know too much about the real estate market here either, though it seems that returns are still higher in the States. I'd imagine places like Bavaria and Heidelberg are very high-priced, though given the stable demand for those areas, it might pay off if you can afford the price of getting in. Down here in the Saarland prices are very reasonable, and to the university and the other Hochschulen here in Saarbrücken there seems to be a lot of rental demand, but it's probably not as stable of a market as some of the bigger/more popular areas in Germany. (I'm just guessing about all of this, based on my personal experiences. I'd have to do some real research to be sure.)