Have you ever considered owning a rental?

18 01 2011

Now is an awesome time to look into adding a rental property to your portfolio.  With rates low, inventory high, having a fair amount of negotiating room on home inspections, what are you waiting for?  Depending on what your situation is, you’ll likely need 20% down.  Let’s put this into perspective for a minute…you buy a $100,000 property & rent it out for….say…$650-700/month.  You had to put $20,000 down to get into it & you’ll need to continue to make payments on the part you finance (probably around $560/month).  If you have the renters pay their own utilities, you’ll be getting a check every month for between $100-$150 if you choose to manage it yourself.  You’ll also have a property that will likely continue to appreciate over time (in the past, homes have come close to doubling in price about every ten years in Billings), you’ll be able to write off your interest on your loan, and you’ll have a place to reduce taxable income (mowing, supplies, etc.).  There are other benefits, too, but if you put that same $20,000 into a mutual fund, it wouldn’t give you a monthly check, give you tax benefits, and have the opportunity to appreciate at the value of a $100,000 investment.

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