Many years ago, Las Vegas hotels would entice
customers with inexpensive rooms, meals and entertainment so they would
gamble. It may have worked initially but if you’ve been to Las Vegas
recently, the bargains are gone. Hotels expect each division to be a
profit center on its own. As a consumer, I might not like the changes
but as an investor, I’d have to be pleased with increased profitability.
Years ago, real estate investors used to accept negative cash
flow buoyed by tax incentives in hopes of making a big payday due to
appreciation when they sold it. Today’s investors are focusing on
tangible, current results like cash flow and equity build-up.
Cash flow is the amount of money you have left over after
collecting the rent and paying the expenses.
Since rents have gone up
considerably due to supply and demand in the last few years and mortgage
rates are at near record lows, income is up and expenses are down, making the
cash flows attractive.
If the cash flow is sufficient, you could have a good investment
even if the value of the property never increased.
Cash on Cash doesn’t
consider appreciation and measures the cash flow before tax advantages by the
initial investment. A rental with $3,170 CFBT divided by an initial
investment of $29,000 would generate a 10.93% Cash on Cash rate of return.
Low down payments on investor properties are also a thing of the
past. Non-owner occupied mortgage money is available but the investor
should expect to put down 25-30%. An advantage of having a smaller mortgage
is a lower payment.
Most mortgages are amortized loans with both principal and
interest due with each payment. The forced savings of the principal
contribution builds equity in the property and can be considered a part of
the rate of return.
A $100,000 mortgage at 4.5% for 30 years would have $1,613.29
applied to principal in the first year. Divide that by the same $29,000
initial investment and the amortization would generate another 6%.
Without factoring in appreciation or tax advantages, this rental
example generates much more than most alternative investments. There
certainly are many different aspects that affect the risk and return on
rental investments. If you haven’t scrutinized single-family rental
opportunities in a while, you should look again.
As a Residential Finance Consultant, I have the
training and experience to provide solutions to make homes more
marketable and help structure favorable transactions. Please
forward this article to your friends or family who could benefit from it.
We understand that for many people, buying or selling a home is probably the largest investment decision that they will make in their lifetime. Halo Group Realty LLC thus became active in selling Real Estate in 2008 and was setup to make this process a simple and painless transaction. Your dedicated agent will guide you every step of the way to make purchasing or selling your home enjoyable and exciting… as it should be!
Today, Halo Group Realty LLC is at the cutting edge of technology in offering assistance to those in need of real estate services, and we have revolutionized the method of delivering education to consumers. Halo is established as the place for consumers to get the knowledge and assistance they deserve in the process of facilitating the Real Estate transaction, positioning you in the best possible situation to get the best price when you either to buy or sell. With leadership, innovation and forward thinking, Halo Group Realty, LLC is poised to make a huge impression in the real estate market while providing clients the keys to home ownership.
Our goal is to help make your dream a reality and take away all of the stress that goes along with purchasing or selling your home. Whether you are purchasing new construction, an existing home, or just an open space for future enjoyment, representation by a Halo agent is a valuable tool in making your dream become a reality.
Are you new to the Dallas-Ft.Worth area? Are you wanting to conn
"Client Feedback on Johnie Palmer
How fast did your agent respond to your questions: 5 out of 5
How well did your agent use technology: 4 out of 5
How helpful was the support staff: 5 out of 5
How good was the auxiliary services we recommended: 4 out of 5
How did the closing go: 4 out of 5
How close did we meet your expectations: 5 out of 5
How likely are you to recommend us: 5 out of 5
Services used: Buy
How did you find us: Referred by a Friend
Your most memorable moment
When he took me around to actually look at the houses for sale. He was very knowledable about the homes and the neighborhoods the homes were located in.
The moment you'd rather forget?
I didn't have any moments with Johnie that I would like to forget.
I had a great experience buying a home in Texas and havin Johnie as my agent. I relocated from Maryland and Johnie was very helpful in helping me and my family find a beautiful home in an area with excellent schools. "