Why do I call Real Estate a friend? Well, because through thick and thin economic times, Real Estate has been an investment you can count on. Even when homes are not selling, with time, the market comes back and prices go up. Stick with a friend, and with time it will show you why you can count on it.
Do you think every Real Estate investor was born rich? If you answered yes to that you are dead wrong. Most start out using the equity in their present home to buy their first investment property. Unlike your primary residence, you have someone else paying your mortgage. It is like a 401K at work where your employer contributes. Only the person contributing to your future here is your renters and the appreciation that goes up year to year. Does your employer give you $20,000 a year for your 401K? The appreciation in your investment property can.
OK, time to take real life numbers and put them to the test of how good a friend Real Estate can really be! You put $50,000 or 20% for a down payment from your home equity line on a duplex that costs $250,000 your payments would be approximately $1663.00 per month. Now if you had renters in both units at $900 per unit you would be making $37.00 per month on paper. That is if there were no maintenance costs. Although you would get those as a tax write off. The important thing to consider is the average of 10% in appreciation over the past few years. If appreciations continue that would put $50,000 back in your pocket in less than two years time. I haven't seen a 401k pay that yet.
Thanks Friend!
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