During the regime of Margaret Thacher in the UK pioneered the concept of disinvestment in real estate. Then this concept spreads through America then to China Singapore, Japan, South Korea, Taiwan, Brazil and now to India. Then new economy of Canada and Mexico as a result of North American Free Trade Agreement (NAFTA), has opened up new revenues and avenues for reality business there as well.
A rate of return often used in real estate transactions. The calculation determines the cash income on the cash invested. Cash-on-cash return would measure the annual return you made on the property in relation to the down payment.
Cash-On-Cash Return= Annual Dollar Income/Total Dollar Investment
When a decision is made to involve the private sector in the provisioning of housing and infrastructure, there are various options and procurement rules there to be followed. It is important for private sector because the procurement route defined will be responsible for various crucial aspects. Housing is the basic need for humanity and the challenges embedded within it can be a through housing research. Cash on cash return in real estate investing in real estate industry can be aptly classified basically three broad categories. Mega privatization, macro privatization, and micro privatization. Mega privatization brings the catalytic influence to the life of the citizens which ultimately helps the other tow categories.
Cash on cash return in real estate investing is must for the investor and its success depends upon de bureaucratization ,internal privatization contracting out, Greenfield privatization , franchising , cold privatization corporation ,divestiture , re privatization ,liberalization, deregulation , rolling privatization and distressed privatization. Cash on cash return in real estate investing depends upon the above described factor. Cash on cash return in real estate investing depends upon various market forms and then the investor can take advantages with it by following some prescribed customs and traditions.
Observe the changing of the competitive private market from absolute state monopolies. Change to private production run from purely government production run. Change to consumer payment from government subsidy. Change to unviable form viable category of items. Change to non merit from merit categories of items. Change to profit making from loss making. Cash on cash return in real estate investing can take advantage by investing in this market scenario.
Look for the organization or public entity where quick decision making, carrot and the stick method, government bars the competitive advantages, incentives from the government and the real estate, hire and fire method , share holders and investors must be the partners of the business ,and the motivation factor and good communication to investors is available.
Cash on cash return in real estate investing can be used to one’s advantage by following some procedures like avoid imperfect communication and out dated information from the organization , observe the frequency of transactions in housing by individuals, asses the every unit of the real estate organization separately as need based , observe the variance of pricing ,the purchasing opportunities , minimize use of subsidies ,leverage financial resources , scope for innovations , a provided target safety net for the investors ,tax incentive to housing and urban link investments , mass media for public opinion, privatization in administrative control and procedures , consultancy services and special court for dispute redressal and settlement then decide whether to invest it or not. If you already have invested in the real estate organization then these points can be examined if you want to know the real health of the organization.\
No single modalities of cash on cash return in real estate investing are free from fault. Since the individual investor can play a significant role so the emergence of stronger individual investment should be supported.
Sources and Referrences:
1.https://www.wallstreetmojo.com/cash-on-cash-return/
2.https://corporatefinanceinstitute.com/resources/knowledge/finance/cash-on-cash-return/
3.https://www.investopedia.com/terms/c/cashoncashreturn.asp
