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of property
*All maintenance and renovation expenses: Upkeep, repair and remodeling.
*Operating expenses/Overhead (if not deducted from capital gains): Utilities
*Total ammortized interest payments at time of sale: The sum of total interest payments
*Tax on Capital gains: Government tax incurred from profit on the sale of property
*Hazard Insurance:
*Mortgage Insurance: Premium paid as a protection feature should the real estate enter default or foreclosure. (this expense can be avoided in some cases)

*Government Recapture tax (If applicable): Tax associated with sale of property financed by Government sources.
*Back end expenses associated with sale of property: All costs associated with sale of a property.
*Opportunity cost (if applicable): The potential loss of profit due to fixed nature of property investment i.e. loss of revenue from missing a more profitable investment
*Inflation: The cost of inflation is also an expense as this can amount to approximately 2-3% of the total value of a property per year.

As evident from the above list, there can be many more sources of expense than profit from a property investment which hints at the necessity for fiscal prudence and keen judgment when purchasing property. When purchasing a property it may be helpful to forecast and estimate the total costs of the property purchase and estimated market value of the property at a future time to assess whether or not the investment will be profitable. It can be easy to overlook some of the many expenses and costs that go to into a property making the purchase and sale prices of property somewhat inaccurate measures of the profitability of the real estate.

In essence, calculating the return on real estate investments is a numerical balancing act combined with market forces, and investment savvy. Knowing the dynamics of the real estate market, trends, property factors such as upkeep, maintenance and renovation expenses etc. are all important to turning a profit in addition to optimizing as many of the possible benefits of property as possible. The benefits of property ownership include all sources of savings, expense reduction, income and capital gain that can be squeezed out of a property.

SECTION II: TIPS AND TECHNIQUES TO CONSIDER IN CALCULATING RETURN ON REAL ESTATE:

One of the most opportune times to calculate the return on real estate is before it actually happens in the form of a property profile. In other words, assessing all the potential advantages and disadvantages before the

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