Regarding Real Estate LLC
If you intend to apply for a commercial real estate loan, a great term to know is mortgage constant. A mortgage constant is the percentage you pay annually in comparison to the total loan amount.
To calculate this amount, you'd add the monthly payments for a single year and divide the remaining by the total amount of the mortgage loan. For example, you may have a $500,000 mortgage and pay $2,000 a month at a 4 percent interest rate.
The cap rate (capitalization rate) is used to determine the ratio of the net operating income (NOI) in comparison to the original purchase price, which can demonstrate the rate of return.
If the constant rate is higher than the cap rate, this indicates there may be a negative return on investment, but if the cap rate is higher, there will be a positive return on investment.
The benefit of using the mortgage constant is it provides a quick way to assess the value of a property you plan to invest in and how profitable it can be.
On the downside, using a mortgage constant only provides a fixed viewpoint of the investment without taking into consideration when interest payments are made. For this reason, it’s best to use the mortgage constant as one of many ways to examine the potential of an investment.
If you’re interested in finding out a mortgage constant for a property, there are free tools found online which can help you make the calculations on your investment journey.
Johnna grew up in Amherst NH and still has strong ties to the Amherst & Mont Vernon Communities. Johnna moved to Manchester at 19 when she purchased her 1st home. She has resided in the West Side of Manchester since 2007. Always having a strong interest in real estate, Johnna and her husband, Jeff, started investing in rental properties in 2017 with the purchase of a 2 bedroom condo in Manchester. They now own 10 properties with the goal of growing to 60 total rental properties. In 2020 Johnna and Jeff started adding short term rentals to their portfolio focusing in the NH Lakes Region and Southern Maine Coast. Johnna achieved Airbnb Super Host and VRBO Premier Host status within the first year.
From May to October Johnna divides her time between Manchester, NH and her beach cottage in Wells Maine. Johnna’s extensive experience with both long term and short-term rental properties makes her the ideal real estate agent to help you start or build your real estate investment portfolio. Johnna works with a lot of home owners selling their homes and buying homes simultaneously and also sellers relocating out of the area.
Johnna prides herself in being hard working, dependable and down to earth. In her free time, she enjoys reading, jigsaw puzzles and spending time outdoors with her husband, dogs and friends.
