We've had a lot of success lately working with property investors and single-family homes. Some have even been able to fetch a 20% return on their investment in our market.
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Some of the real estate investors we work with have found a lot of success with single-family investment properties. Some are even seeing annual returns up to 20%.
Here's a hypothetical example. Say you buy a $100,000 rental home and you need $25,000 down with $10,000 in reserve in case of issues like vacancy or repairs. On top of that $35,000 investment, you'll have costs like maintenance, taxes, property insurance, and property management of $525 a month. The rent will be $1,250, and the mortgage payment will be $400.
This would give you a monthly profit of $325. Since you can write off depreciation, that's essentially tax-free. Effectively, you're looking at a profit of $425. If you add in an assumed appreciation of 2% yearly, you're looking at $7,100 in yearly profit over time, which is a 20% return on your initial investment.
By properly leveraging the investment, you can get up to a 20% return.
Many people only look at real estate in terms of costs and monthly rent, but if you use a mortgage and leverage, the return on your cash can get pretty significant.
If you have any questions about finding investment properties or about the basics of real estate investing, just give me a call or send me an email. I'd be happy to tell you more.
