8 Essentials Every Church Should Know Before Investing in Multimedia | graphic multimedia

2. Find Your Screen:Many people don’t give much thought to the screens, but they are a key piece of equipment for any multimedia system. As such, several things should be taken into account. “Where can it be hung? Should it be electric or fixed? Should we go with one screen or multiple screens? Which aspect ratio is right for us – 16:9 or 4:3? What surface should we go with?” These are all questions to consider. Again, Fowler will help you determine the right size for your congregation, and once the size is established, that will start narrowing down your placement options. (For screen info click here)3. Choose A Projector:Once your screen placement and size are decided, you can determine what kind of projector you will need. After that, you can choose where and how you want to mount the projector. Most can be ceiling mounted, and you’ll want to place it as close to the screen as possible to achieve the brightest picture. Of course, when mounting to the ceiling you will need to be sure there is enough attic space above the projector to run cables plus a structure to attach the mounting hardware to. An electrician will need to provide power at the projector location. If you have high ceilings you will need to look into using scaffolding or a lift. (You might ask your sales consultant about installation.)There are other options when it comes to projector placement. Projecting from a balcony or from the back of the sanctuary usually requires a projector that offers multiple lens options. This allows you to select the perfect lens for your specific throw distance and screen size. You might also consider a slightly brighter projector because there is some light lost in a long throw application. This option will appear more expensive initially; however, once you consider the extra cost and time required with ceiling mounts, it often comes out to be about the same. Also, regular maintenance and lamp changes are often much easier with a long throw application.4. Plan For Cameras:We often find the decision to add cameras to your church media system is usually an after thought. However, more and more churches want to incorporate cameras into their existing system. If done well, it can greatly enhance the worship experience; but if done poorly it can be a major distraction. There are so many options available – robotic; manned; CCU control; HD or standard def, etc. – and the decision you make on your cameras will affect the direction we go with your projector, switching, scaling, cabling, etc. So, even if cameras are not on the immediate agenda but you are considering them for the future, plan now and it will save you money in the long run. (For more camera options click here.)5. Select A Switcher/Scaler:A switcher allows you to switch between your sources. A scaler takes all of your video signals and scales them up to a higher resolution to match your computer’s resolution (which should also be the native resolution of your projector). Be warned! There are several consumer grade switcher/scalers on the market that use low quality scaling engines; your image quality can be significantly impacted by using one of these.When using a switcher/scaler you can choose to go with a single scaler or a dual. Single scalers allow simple dip to black transitions, whereas a dual scaler will allow for all of your effects like cross fades, wipes, cuts, etc. Again the one best suited for your needs will be determined by the direction you want to go with your system – the use of cameras being the biggest question. With cameras we always recommend a dual scaler. Whether or not you are doing High Def will determine which dual scaler.Some people try to save a little money and use their projector as the switcher. They simply plug their sources into the projector and then switch sources using the remote. The downside is that your projector will not do the scaling as well and remotes can be unreliable (if you do this make sure you hard wire your remote). Delays, glitches and unwanted on-screen text often occur, and most projectors don’t even allow you to easily select the source you need – you have to hit the input button until you get to the source you’re looking for.Traditionally, if you planned on using cameras, you could use a video mixer instead of a switcher/scaler. The primary difference is that rather than scaling all of your sources up to a higher resolution, you will need a scan converter to convert all of your signals down to video. If you do this though, the quality of your computer images will suffer. But now that switcher/scalers are available, this isn’t even an issue.6. Develop Your Infrastructure:The infrastructure of your media system is HUGE when it comes to the quality and success of your entire system. You can install a $100,000 projector with low quality cable or leave out a distribution amplifier and your image will look terrible! And a lack of planning on your infrastructure will hinder your ability to add to your system in the future. So, decide now – will you ever want to add:CamerasChoir confidence monitorsMultiple screensDigital signage in the lobbyRecording and duplicating equipmentIf so, do you only want camera feed or will you want everything that’s on the screen?Your infrastructure may cost as much as your projector and screen, but you want to do it right the first time. You should only have to plan routes and pull cables once; after that it will be very simple to add to the system as your ministry grows.7. Choose The Best Sources:Again, as with infrastructure and screens, this is usually an afterthought. No big deal, someone’s donating their old computer or you already have a VCR/DVD player you can use… Or maybe you’ve recently seen the TV commercial where you can get a brand new computer for only $299! If you are only planning on checking emails or doing word processing with your computer that may be fine; but in order to display high end graphics and video, plus store everything your ministry does and display it quickly, you need a computer that is designed for this type of professional application.As for your VCR/DVD player and cameras, a good rule of thumb is to stick with professional grade products. Don’t spend the church’s money on something low quality from a retail store – invest that money in quality pieces. Yes you can go consumer and yes it will work, but those products are not designed for a professional application. As a result you will experience things that will be a big distraction during worship.8. Know Your Budget:There are hundreds of ways to do things, hundreds of products to choose from and pros and cons inherent with each, so for direction and a starting point we always ask the church for a budget to work with. On the other hand, the church is thinking, “Well, I don’t know what this stuff costs, that’s why I called you,” and so they either say they don’t have a budget or they give us a random number that isn’t necessarily realistic. A reputable dealer is not asking for a budget so they can spend every cent you have; they need to know what they’re working with in order to put together the best system for your church. It takes serious creativity and hard work to design a great media system on a limited budget. We can provide a big picture design and then work with you to implement it in phases.So, to sum it all up, there are no right answers or simple solutions. Get your leadership team involved in the planning of your system – not necessarily what equipment you want, but start with what you want it to do and then prioritize that list. Know what’s important in the short term and long term. Remember that when designing a system, flexibility always equals money, so everyone needs to be on the same page. Clear communication is the key to achieving your multimedia ministry goals.For more information on any of these topics, please contact Fowler at 405.321.8122 or toll free at 1.800.729.0163.

Agriculture Isn’t All About the Money | Livestock

I want to clear some things up and challenge readers’ thinking on the concerns and comments about agriculture and raising livestock being nothing more than a money-making sector of the economy. I’ve noted several comments about this in a number of sites, not to mention articles that claim that “farmers just raise their animals/crops because they’re looking for a profit.” I never exactly questioned the why’s and wherefore’s of these comments until now.Why is it that people think and believe that farms and farming is merely a money-making venture, or that farmers (who I prefer to call producers) raise livestock like cattle just to make a profit off of them?? Also, why is there such negativity and bitterness surrounding the fact that producers growing crops and raising livestock do it to not feed themselves but to make money?? I don’t get it, coming from a farming background myself I just can’t get my head around the reason for people to carelessly throw that out there and expect everyone to take it as fact.Producers in North America are focused on making money, not food, but… The problem is that it’s really only partly fact. And what most don’t realize, especially those who are generations removed from the farm, is that in most if not all agricultural enterprises, very little to no true profit has been made. Yes, the very thing that we producers end up with at the end is money in the pocket, because the farms we run are done so as a business (except for the urbanites’ hobby farms), but this money we get is gross profit or income, NOT net profit or just plain profit. To say that people farm or raise livestock just to make a profit is really an outright lie. It’s also a show of ignorance and misunderstanding about finances because there is far more to it than what people might think.When a producer calculates profit, he cannot ever figure that he is making money simply by the check he gets from the barley grain or cattle he sold. This often-yearly cheque that he gets is what gross profit or income is all about. Net profit is determined when all of his expenses that he has incurred from the farm’s operations are subtracted to the income he received from what he sold. Income should never be confused with profit, because income is really the money that comes into a business after a product is sold, excluding expenses. Profit or Net Profit, however, is money that is left over after all expenses are deducted from gross profit. If no income is left over after all expenses are deducted, it is called Net Loss.Expenses for the average farm are primarily fertilizer, fuel and feed. Fuel and fertilizer are the biggest costs to a farm, such expenses often exceeding $5,000 per acre per year. Most farms in North America that are not hobby farms are over 100 acres in size. So, expenses in total would and could be well over $500,000 per year. It’s not common for income in farms to exceed this amount. If it does, it’s not by very much, just enough to break-even.Despite these figures the fire-storm in the media and non-agricultural people alike still continues about producers “doing it for the money.”Farming in North America is indeed a business and thus a “money-making” venture. It is definitely not subsistence agriculture because the people who grow crops and raise livestock are not raising them to feed themselves and their families, but to feed others who cannot or will not grow crops or raise livestock to feed themselves. Thus instead it is known as “commercial” agriculture and consequently, a business just like any small businesses that do not focus on grain, milk, meat, wool, eggs, fruits and vegetables as the end product. So why does it seem like people think that agriculture should not be treated like a business and a money-making venture just like any other business?And what other reasons are there that may be the cause for people to accuse those who farm to just “do it for the money”?Answer: Misunderstanding could be part of the problem.That has to be it. In Canada we have about 95% of the population who are so far removed from agriculture they have never seen a cow, horse, pig, chicken, goat, sheep, or donkey in real life before and have never had to experience the hard work that goes in to making a farm tick. It’s these people that are easily mislead by extremists and the media who put blame on the few people who abuse and mistreat their animals, and are lead to assume that it happens all across the country. This is no different south of the border where 98% of the population are urbanites and/or have no farm experience whatsoever.I have been taught by close family and friends that there are people out there to get you. And that doesn’t limit those suburbanites who constantly worry about criminals sneaking into their home and stealing their jewelery, it’s a big problem for farmers who have to deal with the constant bureaucratic, politically correct, Disney-ized BS that comes from the media, animal rights extremist groups, environmental extremist groups, and the general population who get suckered in to this vortex of brainwashing, hypocritical misinformation and half-truths. No wonder it gets so confusing and overwhelming for those trying to sort the false truths from the REAL truths!The thing many people don’t understand is that farming has never been nor will ever be a non-for-profit, must-rely-on-donations kind of thing. Farming doesn’t rely on having to warp and manipulate people by taking advantage of their emotions in order to open their pocket books like what PeTA and HSUS does in order for them to wreak more havoc on the very people who are relied on to make food for us. Farming relies on hard work, the weather, Mother Nature, and the fact that the sun will pop up on the horizon every morning or the clouds will dump enough rain to make the crops and pasture plants grow. It doesn’t rely on brainwashing the general public into believing the web of lies and half-truths spun by them to get more money out of gullible people. As a matter of fact farming has really minded its own business and kept help bringing food to the table to millions of families until these lobby groups showed up.(Not saying it’s a bad thing though, as I have to give credit to these lobby groups for pointing out the bad and helping improve the practices, management and care involved in producing crops and raising livestock!)But you know what? Despite giving some credit to PeTA, HSUS, Sierra and a few other extremist groups out there, I would really love to know what these groups do with all that money they get from people who want to “support the cause.” Where does it go? Does it just get pocketed, or does it get used up by operational expenses, or is it used up for something more sinister that these groups (or at least some of them) wish to never disclose? Hmmm…I know one thing though: I certainly know what farmers and producers do with the paycheck they get at the end of every year.Nothing is for FreeNow for those of you who are still chomping at the bit to challenge me further with this monetary issue, let me throw something out there for you to chew on, just to put things into perspective. If you had no outside job and could not rely on donations nor could set up a trust fund or donation package where you could rely on people to practically give you the money, how would you run a farm and take care of your animals? How would you be able to pay for veterinary bills, fuel for the tractor, fertilizer, supplemental feed in the form of loose mineral or salt blocks and/or feed grain for those animals that won’t gain much on hay, feed like hay, repair bills on machinery, building new buildings, fences or corrals? Or what about paying taxes, personal expenses, electricity, water and heating bills? The answer is you would not be able to farm nor take care of your animals at all. You’d have the SPCA knocking at your door with a request to surrender your animals over to them because you don’t have enough money to feed or water them and they’re getting thinner by the day.That money producers get after selling their crops, selling their cattle has to go back into the expenses that are generated by farm operations. Someone with half a brain can figure that out. Farmers cannot produce food for free because… ready for it? NOTHING IS FOR FREE. I mentioned above how much money that should be expected to come out of a producer’s pockets just to raise some grain; similar thing applies to those who raise animals, whether it’s on a ranch or in CAFOs (Confined Animal Feeding Operations). It’s pouring more salt in the wound when you get people assuming that their food, especially animal products like meat, milk and eggs, can be produced for free, or in other words the farmers and producers get nothing in return for producing and taking off and essentially selling the end product off their farms or ranches. I don’t get that. Why would anybody be stupid and foolish enough to think up something like that?? Can’t folks understand that anything that goes into a farming operation is NOT for free?? Feed, fuel, fertilizer, and a whole host of other expenses, really add up!! Those things are not for free, not in any way, shape or form! And yet people are so belligerent and hateful about the fact that a farmer makes a ton of money on their end product. It’s bad enough that people are so frickin’ negative about agriculture and farming, but to turn around and imply that food should be produced for free or for nothing in return just makes it worse.And you know what, I think farmers have the most thankless job in the world. You rarely get any random person stop by at a farm and thank them for keep their tummies full every day, if ever. Instead you’re more likely to get some nosy person tell you that your dairy cows are starving to death out on fresh green pasture or wanting to give you heck for leaving a “dead” horse or cow out on the “field” (which is actually just sleeping away in the sun.) Or even worse, some new cityslicker wannabe-country-bum neighbor threatening to sue you because of the smell and noise that’s coming from your farm and fields surrounding their little acreage. And you think that farming can survive without getting anything in return–even monetarily? Not a chance. Sometimes I like to tell people who get too carried away with their little rants about agriculture something to the effect of: “If you hate agriculture that much, why do you even eat? Why do you even bother putting food in your mouth if you’re going to be that spiteful to those people who worked so hard to put food on your plate?” or, “Why don’t you start producing your own food if you think you can do it better than the farmers that have done it for a millennium?” Really, it’s true: Farmers don’t get much thanks, if at all, so the only “thanks” they can really get is the yearly income they receive when they sell the grain, livestock, eggs or milk they’ve worked so hard to produce. And where does all that income go? Right back into the farm and its operations, of course!!You know it’s really funny how people can be so prejudiced, belligerent and convoluted about this very topic, and yet these same people that have jobs and make a lot of money never get to see their money getting put into things to help produce food. Instead they spend it on vehicles and RVs, huge houses, house parties, expensive decorations and furniture and many other things that don’t give a dime right back at the end of the year. Instead they put more of their money into things that take more of their money away. And then you get the other end of the spectrum where you get people who rely on welfare cheques from the government because they can’t move their lazy rears to work and earn money for themselves!! How hypocritical!! And these people, I find it amazing that they are able to sit there and bash farmers with their mouths full of the very food that those farmers busted their asses and saved every penny–never spending any of it on the expensive junk that this person with a high-paying office job was able to get, nor even relying on the monthly welfare cheque to sustain them–to produce the food that gets put on that person’s plate. What a shame. And these people expect farmers to produce food without making a “huge profit” at the end of every year?! Boy I would love to have one of these folks try to produce food or raise livestock (and raise them more humanely than what they see the average farm do) without spending a single penny!!Agriculture… it’s a Way of LifeHave you ever wondered why only 2% of the population in the US and 5% of the population in Canada are directly involved in agriculture? It’s because it’s something that can’t be made easily like it can in an air-conditioned office, and it’s something that most people don’t like: little profit and hard work, respectively. Most people choose to live in the cities and have an “easy-paying job” because they would rather have it easy than have to spend a lot of blood, sweat and tears to get something that accounts for 10% satisfaction in the end. Yes, my friends, agriculture and farming is hard work, it is the ultimate definition of hard work, just like any other primary-industry job is. On a farm, especially one with livestock, you are working 7 days a week 365 days a year, with no holiday pay, no benefits, and definitely no chance for a holiday-getaway.Is an office, white-collar job considered a way-of-life as a career? I know most of you would answer no; most who work as a white-collar worker do it for the money. I wouldn’t doubt that even most blue-collar workers who don’t take their job with a passion do it just to gain a bit of income and because they don’t like being stuck in an office all day. But of course you get those blue-collared workers who love their job and do it because they wouldn’t have it any other way, regardless of the pay. But are those blue-collared jobs considered a way of life in the same way that farming is? My biased and opinionated answer is no.Why, you may ask? Basically it’s this: no other career or job involves working with the land and the environment in such a way that agriculture does. Forestry involves mainly cutting down timber to be made into wood products. Mining and quarrying involve taking minerals, rocks and stones out of the earth. Silviculture is merely planting trees and watching them grow. Agriculture, however, is seeding, growing and harvesting grains, caring for and raising livestock in such a way that you help with bringing newborns into the world, making sure they are healthy as they grow and watching them grow into big, strong animals, and feeding them and treating them if they get ill. You quite literally get to work along side Mother Nature every day, helping do what she does best in the wild, doing it because you have a compassion for seeing things grow and watching the life cycle play itself out right before your very eyes. Now tell me: how can that not get into your blood?I know I may be romanticizing things a bit and I apologize for doing so, but my point in all of this is that agriculture is more than a sector of the economy, it’s a way of life for those few people who are lucky enough to experience it. You get a different perspective of the world when you’re sitting up high in a tractor or on a horse, and you get to be a part of what makes the natural, un-urbanized part of the world tick.So what really makes agriculture a way of life? It’s the passion, the 10% satisfaction in the end after having to go through the 90% hard work, the risks and rewards, the gamble and payoffs, the mistakes you make and how you learn the hard way from them. It’s Nature, the ability to own and raise animals that are otherwise illegal to have in most cities and towns, the pride you feel when you get to where you want to go, the hardships you experience that almost brings you to your knees, and the heartache you feel when you lose something you’ve worked so hard to gain. It’s a life less, really, that teaches you a lot about patience, stubbornness, humbleness, peace, death, hard work, how life’s never easy, how the animals we raise perceive us and see the world, if we’re lucky enough and wise enough to see it. I could go on, really, as the list is endless. It can be so hard to fully describe to the average person on the street who have never been directly involved in agriculture how it isn’t just about the money and how it’s a way of life. I guess that should be left up to us producers to explain that to folks to the best of our ability.Money is important for everyone, regardless of their career, background, ethnicity, religion, race or gender. So there’s really no reason why people must think that agriculture should not be any different. Producers have to spend money to make money; they’d don’t make money to spend it.A Final WordMost people in North America take buying things for granted so much that they often lose sight of how businesses like farms are run and why things must be “done for the money.” People can be so cruel and yet so gullible it’s sad and frustrating at the same time. It’s always due to misinformation, propaganda from extremist groups dictating how we should run our lives or what we should put in our mouths, half-truths, and the media displaying things–such as inhumane treatment of animals like dairy cows–in such a way that makes people think it’s a common thing when in most cases the opposite is true. These same people are able to spout out how farming is so cruel and inhumane and it should be this and should be that. And yet, when you put them in a real-life farming environment and get them to see how things are done and why they are done, they suddenly get their eyes opened up, hopefully enough that they wouldn’t dare shoot off their mouth about how bad farming is ever again.It’s so easy to lay blame on something we’ve created when it’s ourselves we need to be pointing at. We’ve created our own monster being civilization and urbanization that helps lose sight of what the real world is all about, where our food really comes from and how it gets to our plate. There is so much misunderstanding about the fact that farmers can’t produce food for free because nothing is for free. It’s time to put a halt to this misunderstanding and get people to wake up and really start to see what agriculture is really about. That can start by getting people, like you my readers, to make an effort to thank a farmer for producing the food your are able to eat, because without them, without those people that have the most selfless job in the world, we wouldn’t exist on such a grand scale as we do today.

How Much Money Did You REALLY Make on Your Real Estate Investment? | investing

Have you heard this statement before? “I made a lot of money on this property – I bought this house for $200,000 and I sold it for $300,000″. Have you ever been in a conversation with someone and heard a story similar to this? Does $100,000 sound like a good return on investment? It depends on many factors. The example in this article will initially focus on real estate used solely as an investment, but your principle residence will also be examined this way if you are trying to figure how much money you have made living in your house.How long did it actually take this person to make this money?If you bought a house for $200,000 and sold it for $300,000 one year later, versus 20 years later, this makes a big difference. Why? When looking at investment returns, you have to look at how long it took for you to achieve the return. This is true because when looking at other investments, time as well as the return itself will be the common yardsticks for comparison. If the price increase of $100,000 happened in one year, this is a 50% return in one year. Other investments might average 1% for cash, 2% for bonds, and 5% for stocks for that same time frame. If you made this $100,000 in 20 years, this would mean 50% spread over 20 years. If you do a simple linear calculation, that is 2.5% each year. Now, the bonds and stocks are pretty attractive compared to this real estate investment. This is important because most people hold on to real estate for a long time and forget how long it took them to achieve the return that they received.The numbers presented are usually only about the buy and sell priceDid you notice that the only numbers mentioned in this example are the buy and sell prices? For most goods, these are the only prices that matter when examining if you made money or not. With real estate, this is not true. Why? Real estate has to be maintained, which is not the case for stocks, bonds, cash or any other paper based or contract based investment. Why does this matter? If you have ever lived in a house, you know that there are utilities to pay, renovations to make, repairs to perform and taxes to pay. If you were to buy a GIC at a bank, and the bank said to you: “you will receive $100 in interest each month. However, to keep the GIC you need to pay $20 a month for a maintenance fee.” Wouldn’t this mean you would only make $80 per month, and not $100 per month? This same thinking applies to real estate. If you buy a house as an investment, and you have to pay utilities, taxes, renovation costs, mortgage interest, and repairs as well as costs to buy and sell the real estate, shouldn’t these be accounted for in your return? If you are renting the property, the rent collected would also add to your return. If you are trying to rent a property, but it is vacant for 6 months, that 6 month period is not part of your return.As an example related to the above, let’s say the house was bought for $200,000 and sold for $300,000, and it took 5 years for this transaction. To actually buy the house, the legal fees, land transfer taxes, mortgage contract and real estate fees amounted to $1000, $3000, $500 and $5000 respectively. The total set up costs would be $9500 so far, which would be subtracted from the money you made, because it actually costs you $200,000 PLUS $9500 to physically buy the house.Let’s say now that you rented the house for $2000 per month, but you had mortgage costs of $600 per month in interest (note that the principle is not included in this figure because principle is your money that you receive in return). You also have property taxes of $250 per month and utilities of $500 per month. You are netting out $2000 – $250 – $500 per month or $1250 per month. With the mortgage interest deducted from this sum, you would have $1250 – $600 or $650 per month. This equates to $7800 per year in extra income. Since the house was rented for the entire 5 year period – this is an additional $39,000 in return.If for example, work had to be done to get the house ready to rent, wouldn’t this cost be part of the return as well? This is money that you have to spend, and it is only being used on this investment property. If it cost you $5000 for paint, landscaping and minor repairs, this would come off of your investment return.If the roof had to be fixed during that 5 year period, and you paid another $5000 for that repair, the whole amount would be deducted from your return. People may argue that the roof will last another 25 years, which is true – but you only receive the benefit of these repairs if you keep the house! If you sell the house, you may receive the benefit of keeping the house well maintained in a higher selling price, but it will also depend on how hot the real estate market is, what the local neighbourhood is like and other factors which are beyond your control and will come into play only at the time that you are making the sale. This means now that you have an additional $10,000 deducted from your return.To sum up so far, the house profit generated was $100,000. You would subtract $9500 in closing costs to buy the house, add $39000 in rental income less expenses, subtract $5000 for minor repairs, and deduct a further $5000 for a major repair. This would leave you with $100,000 – $9500 + $39,000 – $5,000 – $5,000 = $119,500. Since this transaction took 5 years to complete, the $119,500 should be spread over 5 years. This means that the return per year is $119,500/5 years or about $23,900 per year. Since the original price of the house is $200,000, this means that you are making $23,900/$200,000 or about 12% per year. This is a relatively good return, but if stocks are making 10% per year, this is fairly comparable to what everyone else is getting. Would you have that impression reading only the original story: “I made a lot of money on this property – I bought this house for $200,000 and I sold it for $300,000″?What About the Effort in Managing the Real Estate Property? Consider the time you are spending on your house. If you are a landlord, you will have to inspect your house, make sure your tenants are paying you on time, look for tenants and do minor repairs. If you don’t like doing these things, this is considered work and it will cost you in terms of time you could be doing something else. How to account for this? Tabulate how long it takes you to manage the real estate investment, and multiply how many hours you spend by how much money you are making at work – this would represent a substitute for what else you could be doing since you are already working in that job. If you spend 5 hours per month maintaining the house, and you make $20 per hour at your day job, this is an additional $100 per month in costs. This translates into $1200 per year in your time. Note that with paper based investments like stocks and bonds, there may also be time required to read the news, follow how the stock market is doing and research for timing and alternative investments. An underlying factor here is whether managing real estate feels like a job or a hobby. If it feels like a job, the time should be treated like a job. It the time spent is enjoyable and feels like a hobby, you will get benefits that cannot be quantified and it will likely not bother you to spend time taking care of the property.If you spent time cleaning up the property or moving things left on the property by previous owners, this would all be included in your costs. The rule of thumb is that any money or resources you would have to outlay for this property would be added to the costs and would affect the final return. Any extra money generated, like rent or credits would be added to the return. Another way to say this is: if I didn’t own this investment property, would I still be spending this money? If the answer is no, this would be deducted from your return. If the answer is yes, the cost would not be deducted.What about taxes?Taxes have been left out of the calculation s so far, but if this is an investment property, there will be capital gains taxes on the return generated. They may even be taxes on the rental income if it is deemed to be income, and all of these numbers would get reduced. This is also not part of the story that people describe for their own real estate experience, but you should consider this in your experience. If you borrow money, the interest is tax deductible for an investment property so the situation goes both ways.What about Leverage?It was assumed so far that you are buying the house with cash, or you are borrowing money and receiving it in return once the house was sold. There are calculations out there where people put a fraction of the price of the house as a down payment, borrow the rest and then buy and sell real estate. There are expenses similar to what was calculated above, but the base for the return calculation is much smaller, which makes the return much bigger.Going back to the story in the first paragraph, you do not know if the person borrowed money to buy the house or not. Most people don’t consider that as part of an investment return and don’t tell you that as part of their result.Let’s say you would put down 10% of the value of the house when you buy it. This would equate to $200,000 x 10% or $20,000. Over the time that you borrow the money, you would be paying interest. Any costs involved in setting up the borrowed funds, like appraisal of the property, legal fees or bank fees would be part of the financing costs. The interest paid would be part of your investment as well. If you borrow $180,000 and the interest rate is 4%, you are paying $7200 per year. Over 5 years, this is $7200 x 5 or $36,000. If the cost to set up the loan was $3000 in total, the actual amount of money that you invested would still be $20,000. The costs to set up the loan and the interest charges would be deducted from the return. Looking at the original example, if you have a gain or $100,000 plus the adjustments, the total gain was $119,500. If you subtract the costs of the leverage, you would have a net gain of $119,500 – $3000 – $36,000 or $80,500. If you were to go ahead and calculate the return on your investment, you would use a base of $20,000, and a gain of $80,500. Since the time period to earn the return was 5 years, this would be $16,100 per year. On this base amount, the return would be 80.5% per year. This number is much larger than what you had without the leverage – the only difference is that the money was borrowed rather than paid in cash. Once the house is sold, the bank would have to be paid the $180,000 that was lent, but you get to keep the whole gain over and above that amount.Leverage can be good or bad depending on whether you make or lose money. Leverage magnifies your gain and your loss. Since most real estate deals happen with borrowed money, be mindful of how these numbers get calculated. It may be the leverage that makes the return astounding, not the return on the original investment using cash. If you see advertising for real estate return calculations, be mindful of how much of these returns are based on leverage versus the actual gain in the property itself.What if the Price of the House Goes Down?Yes, prices of real estate properties can go down. In the long run, prices are said to move up almost always, but this is also true for stocks, bonds, and physical goods as well. The reason why prices go up is not entirely because real estate is a good investment – it is because inflation keeps rising, and as that happens the numbers will always get bigger. If you have a fixed amount of something, and the number of dollars keeps rising, the number of dollars available to buy each thing will get larger. This is why all investments will go up if you wait long enough and if the merits of the investment are still true in the long run. If the price of the real estate property decline while you are holding it, all of the expenses will still be there. This is why some people lose money in real estate. It may take 5 or 10 years for a property to recover in value once it begins to decline – so you have to be willing to wait about this long if you want the adage to be true.What if I Live in the House?If you live in the house, the wrinkle in the calculations is that some of the money you are paying is for expenses you would pay anyway. If you didn’t buy a house and rented an apartment, you would have to pay some equivalent in rent and bills. You can take the difference between those two situations and this would be the money expended, and the return generated as well. Contrary to what a lot of people say, owning is not always better than renting – it depends on the circumstances and what is important to you. What you choose as a lifestyle is very important when deciding whether you have a house for the money or because you like to live there. There will not be any taxes on a house that you live in compared to an investment property, which is another important consideration.What if I Have a Business at Home?If you live and run a business from home, this is even more advantageous to you because you can write off expenses and reduce commuting time and other costs of going to work, while still retaining the income that the work generates. This would generally make the expenses of owning a home cheaper because some of them are tax deducted, and the home make generate more income because it replaces location expenses. The idea of choosing your lifestyle becomes more important here as your home life and your work life are being stationed in one place. If there are issues with your home, this will have a larger effect on you.Real estate is not a good or bad investment – it can be all of the above. The point of the article is that people misrepresent what actually happens in real estate by leaving out selected information. It is usually losses and monthly expenses that are ignored in favour of the big gain made on the price. All aspects of the investment need to kept together to find out if it is really worth it for you to buy real estate.