Evaluating a Featured Investment Property

As an investing landlord you receive many benefits beyond monthly rent.

For example:

• Property Appreciation: Over time, the value of your property may increase, leading to potential profit when you sell.
• Tax Deductions: Landlords can often deduct expenses related to property management, such as mortgage interest, property taxes, insurance premiums, and maintenance costs.
• Steady Income Stream: Monthly rent provides a regular income, which can be particularly beneficial for financial stability and planning.
• Equity Building: As tenants pay rent, you can use this income to pay down your mortgage, gradually building equity in the property.
• Leverage: Owning rental property can provide leverage to obtain additional financing for other investments.
• Control Over Investment: Unlike some other forms of investment, being a landlord allows you to make decisions directly affecting your property's performance and value.
• Hedge Against Inflation: Rental income and property values typically increase with inflation, protecting your purchasing power.
• Passive Income Potential: With effective property management, rental income can become a relatively passive source of income.
• Portfolio Diversification: Real estate provides a tangible asset that can diversify an investment portfolio, reducing overall risk.
• Community Impact: Providing housing can positively impact your community, potentially leading to tenant goodwill and a sense of contribution.

Take a look at our latest listing, as we evaluate it as a potential investment opportunity.  Find the full listing HERE

Scenario 1  40% Down

Purchase Cost $315,000

6.99% with 1 point rate buydown (cost for rate buydown $2,098)

Principal & Interest: $1256

Property Taxes: $91.33

HOI (estimated): $50

HOA: $450  (incl Exterior Mnt of Unit; Roof Repair; Roof Replacement; Blanket Ins Policy; Water; Sewer; Garbage Collection; Pest Control; Front Yard Maint; Common Area Maint; Street Maint

Total Monthly Payment ($1847.33)

Rental Income $2000

Monthly Net   $152.67/mos

The rate can be bought down to 6.125 with 3.5 points , the point cost for that would be $6700 (vs the $2098) , and would reduce payment by $108/month. 

Scenario 2 Cash Purchase

Property Taxes: $91.33

HOI (estimated): $50

HOA: $450  (incl Exterior Mnt of Unit; Roof Repair; Roof Replacement; Blanket Ins Policy; Water; Sewer; Garbage Collection; Pest Control; Front Yard Maint; Common Area Maint; Street Maint

Total Monthly Payment ( $591.33)

Rental Income $2000

Monthly Net   $1408.67