All tagged equity

Is Your Equity Working for You or Are You Working for It?

When talking to clients many times they tell me that their investment is doing very well for them. However, they are basing this on what they paid for their property, not on the equity they have built up. For instance, a recent client purchased a 10 unit apartment building almost 30 years ago for $275,000.  Their Net Operating Income (NOI) for this property was about $85,000 a year. This sounds like a good return, until you take into account that they have completely depreciated the building, and the investment is now worth close to $2,400,000. This equates to about a 3.0% return on their equity.