An investor can borrow 75-80% at fixed interest rates on appreciating assets with definite tax advantages and reasonable control. The financing alone is attractive compared to some investments that require 50% cash and have floating rates at prime plus for one or two years.
Home
prices have adjusted 30-40% around the country, mortgage rates are incredibly
low and rents have risen in the past two years due to more demand and shorter
supply. Indicators like these point to a strong and sustained rental market.
Consider
you bought a $125,000 home for cash that would rent for $1,250 per month. With
$15,000 income and allowing for property taxes, insurance and maintenance, it
is still reasonable to expect $10,000 net income. You'd have an 8% return on
investment without considering tax savings or future appreciation compared with
5-year CDs paying less than 1.5% and a 10-year Treasury yield at 1.65%.
The
reasonable control has a lot of appeal to many investors who find the
volatility of the stock market unacceptable and don't want the risk associated
with some of the alternative investments. Please contact me if you'd like to
know more about available opportunities.
No comments:
Post a Comment