Invest in Single Family Homes as Rentals

Invest in Real Estate

Single Family Homes as Investment

Tired of getting almost no return on your investments? Single-family homes used for rental property have distinct advantages over other types of investments.

Leverage

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 interest rates at prime plus for one or two years.

What Makes Rental Income Attractive?

Home prices have adjusted as much as 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.

Example

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. Compare this with 5-year CDs paying less than 1.5% and a 10-year Treasury yield at 1.65%.

More Control in Your Hands

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.

Run Some Numbers for Yourself

Check out our live financial calculators and see what your best investment might be today. While you are there, you can calculate your mortgage payment, see what you qualify for and see what the true cost of waiting is, if home prices or interest rates go up! Crunch the numbers for yourself and let us know if you’d like to learn more.

Leave a Comment