You could be receiving more than 2% on a very secure home investment. Become an investor by buying a home in the area around $450,000 to $500,000 and rent it out. The rental market is the best it has been in years and rents are higher than ever. Don’t worry about the problem of managing the property because there are many property management companies that do an excellent job at approximately 3% of the monthly rental. The only thing you have to worry about is receiving the monthly cash flow check in the mail. The management company pays all the bills and sends you the net amount each month.
In addition to the 5% return on investment, you will also receive appreciation at approximately 5% per year. If you are buying a $500,000 property, your investment will yield $25,000 per year just in appreciation. Who do you know that can save that much money in a year? Do you still want to continue to in-vest in the stock market? Even now, with the Stock Market at a new high, stocks are still a high risk investment. In 30 years of buying investment properties for clients, most of them have doubled their investment money. Can you say the same for the stock market? Real Estate is a very secure investment and makes very good investment sense for the long term. Consider this method of investment and see how it fits in with your investment strategy
Here is an analysis of how the investment would work:
Purchase price of Property: $475,000
Down Payment (20%) $ 95,000
Loan Amount $380,000
P & I payment (4.25%) $ 1870
Taxes $ 417
Misc, Insurance $ 300
Total Payment and Expense $ 2587
Monthly Rent $2700.00
Net cash flow $113.00
Your Investment was $95,000 and your monthly return on investment is 2%. At the end of the year your investment would bring in $1900. Add on to that an annual appreciation of $25,000 and you have made a lucrative, secure investment.
Properties at this price range sell fast so you much react quickly to find a property at this price. Many other buyers are aware of this excellent investment and are buying up these properties. You need to keep your purchase price below $500,000 because the rental market will only support a monthly rent of approximately $2800 to $3000 per month.