Return Quadrant™

The Return Quadrant™ is an easy way to visually see the returns from owning rental properties.

It comes in several flavors:

  • Return in Dollars Quadrant™ – When you’d like to see how much in dollars the property is producing from appreciation, cash flow, debt paydown, depreciation and from the reserves.
  • Return on Investment Quadrant™ – When you’d like to see how much you’re earning as a percent of the total amount you needed to invest to buy the property.
  • Return on Equity Quadrant™ – Once you own a property, you’ll probably be focused on how much you’re earning divided by the amount of equity you have in the property.

The quadrants consist of 4 primary areas of return plus the return from the reserves you need to prudently buy the property:

  • Appreciation – The tendency of a property to go up in value each year.
  • Cash Flow – The amount of money the property throws off in cash flow after all expenses.
  • Debt Paydown – The amount of the mortgage paid off each year.
  • Depreciation – The tax benefits of owning the property from depreciation. Usually in the form of Cash Flow from Depreciation™.
  • Return on Reserves – The return you’re earning by keeping your reserves either in savings or invested in something a little more volatile like stocks/bonds.

For more information check out the blog posts below.

The Ultimate Guide to Debt Paydown for Rental Properties

Debt paydown on rental properties is an important part of successful real estate investing. It can help investors maximize the return on their investments and make informed decisions about when and where to invest, refinance, payoff, sell and more. In this blog post, we’ll discuss the importance of debt paydown on rental properties, the return from debt paydown, the strategies available, when you might want to use them. Read on to learn how to make the most of your rental property investments with smart debt paydown strategies. What is Debt Paydown? Debt paydown is the amount of principal of the … Read more

The Ultimate Guide to Rental Property Depreciation

Are you looking to make the most of your rental property investments? Rental property depreciation is an important tax benefit. It can help you maximize your returns and improve your overall cash flow. In this blog post, we’ll discuss the basics of rental property depreciation, including how to calculate depreciation, rental property tax deductions, and more. With this information, you’ll be on your way to financial freedom. What is Rental Property Depreciation? Rental property depreciation is a tax deduction that allows landlords to deduct a portion of the cost of their rental property over a number of years. This is … Read more

The Ultimate Guide to Real Estate Appreciation

Real estate appreciation can be an incredibly powerful tool for creating wealth and achieving financial freedom. Understanding how to effectively use real estate appreciation is essential for anyone looking to get the most out of their real estate investments. In this blog post, we will discuss the fundamentals of real estate appreciation and how to maximize your returns. We’ll look at what appreciation is, some of the key benefits of real estate appreciation and provide tips and strategies for making the most of it. Whether you’re a veteran real estate investor, or new to the world of real estate, this … Read more

Cash Flow

Ep 5 - Andrea - Total Cash Flow - Inflation Adjusted

What is cash flow for rental properties? Why is it important? How is it calculated? And cash flow reports for your investments. That’s what we’ll cover here. First, what is cash flow for rental properties? Cash flow is the money generated from your rentals after you account for all the income from the property and subtract all the expenses for the property. Income from your property might include: Rent from properties Option fees on properties Additional mid-month payments Utility bill back Income from onsite amenities like laundry or internet Appliance rent IMPORTANT NOTE: We do not typically consider Cash Flow … Read more