{"id":10257,"date":"2024-05-22T10:18:34","date_gmt":"2024-05-22T10:18:34","guid":{"rendered":"https:\/\/property254.co.ke\/blogs\/?p=10257"},"modified":"2024-06-12T07:02:09","modified_gmt":"2024-06-12T07:02:09","slug":"tips-for-applying-the-2-golden-rules-in-real-estate-investing","status":"publish","type":"post","link":"https:\/\/property254.co.ke\/blogs\/tips-for-applying-the-2-golden-rules-in-real-estate-investing\/","title":{"rendered":"Tips for Applying the 2 Golden Rules in Real Estate Investing"},"content":{"rendered":"\n

As a real estate investor, you want to profit from your investment. You’ll also need to know how long it will take to realise your returns on investment (ROI)<\/a>.<\/p>\n\n\n\n

Applying certain rules of thumb can help when determining whether a real estate investment is likely to be profitable. The 50% rule in real estate estimates that real estate investors should expect a property’s operating expenses to be roughly 50% of its gross rental or lease income.<\/p>\n\n\n\n

However, we don’t include mortgages in these expenses. Instead, expenses like property taxes, insurance, maintenance costs, capital expenditures, utilities, and property management costs.<\/p>\n\n\n\n

Therefore, if your monthly rental income is Ksh. 200,000, you should use at most Ksh. 100,000 for expenses. These expenses include property management costs, taxes and other management costs.  The amount also includes periods where your rental property is vacant<\/a>. The remaining amount is your net income.<\/p>\n\n\n\n

The 50% rule is an excellent way to dive into the\u00a0real estate<\/a> business. If you are new to property investment, this rule can help you avoid some beginner mistakes.<\/p>\n\n\n\n

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Guide to Invest in Income Property In Kenya<\/a><\/blockquote>