Local Real Estate Comments and Ramblings


Are Rental Homes an I.D.E.A.L. Investment? PT.3

Are Rental Homes an I.D.E.A.L. Investment?

There are a lot of investment options available for us today.  Stocks, bonds, mutual funds, gold, silver, annuities, etc can all be a part of a solid retirement plan.  
for rent

Some people may claim that I am biased, and maybe that is so.  However, I firmly believe that rental homes are an I.D.E.A.L. investment and should be included in every retirement plan.  Over the next several post I will discuss why this is so and give you some ideas to help you with your real estate investment planning.

Keep in mind that there are no promised returns.  I think the examples that I give are realistic but please consult with your own investment and tax advisers.

As we go through this series I will be using an example of  a 3 bedroom 2 bath home with a purchase cost of $100,000.  There are two reasons for this.  1. It makes the math simple.  2. That is a home that would be very readily and realistically purchased in this area and market.  In other areas the math be be different but the same logic will apply.  

Search Cobb Homes priced from $95-105,000

Depreciation - tax advantages
Equity build

Part 3:

If you have a mortgage on the home it will pay off over time.  In our 15 year example you own the home free and clear in 15 years!  The best part is related to number 1, income.  Somebody else, namely the tenants, paid the mortgage for you!  If you paid cash for the house you can just reinvest the rental income in to savings equity. Either way, you end up with a valuable asset that is still producing income.

This would be an appropriate time to mention that our real estate investments need to be regarded as very long term investments. My own opinion is that 15 years should be a minimum term that you look for length of ownership.  That would be especially true if you are financing the property.  Less so if you are paying cash but ultimately you want to end up with a debt free rental house that provides a nice monthly income.

If you missed it Here are the previous installments:  

Rental Homes- I.D.E.A.L. Investment? pt1

Are Rental Homes an I.D.E.A.L. Investment? PT.2




Bob Southard
Broker - Owner  Atlas Realty Service LLC #75911


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Buy a home, Sell a home, in Powder Springs, Marietta, Kennesaw, Acworth, Smyrna, Dallas, Hiram,and Cobb, Paulding, Douglas, North Fulton, South Cherokee, County, Ga. Call me for all of your real estate needs.

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Comment balloon 0 commentsBob Southard • December 14 2011 10:34AM


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