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Are Rental Homes an I.D.E.A.L. Investment? PT.4

By Bob Southard

Real Estate Broker/Owner with Atlas Realty Service, LLC Ga Re lic. 266576

December 15, 2011 02:05 AM

AreRental 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 canallbe a part of a solid retirement plan.

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. Overthe next several post I will discuss why this is so and give you someideas to help you with your real estate investment planning.

Keep in mind that there are no promised returns. I think theexamples that I give are realistic but please consult with your owninvestment and tax advisers.
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Aswe go through this series Iwill be using an example of a 3 bedroom 2 bath home with apurchase cost of $100,000. There are two reasons for this. 1. It makes the math simple. 2. That is a home thatwouldbe very readily and realistically purchased in this area and market. In other areas the math be be different but the same logicwillapply.

Search Cobb Homes priced from $95-150,000

Income
Depreciation - tax advantages
Equity build
Appreciation
L.

Part 4:

Over the long term real estate goes up in value. Again, youneedto be in it for the long term. I recommenda 15 year minimum. An investmentstrategy of 20 years plus is even better. If you bought 10-12 years agoyour value is more or less just breaking even right now. Ifyoubought 5 years the value has gone down. However the rentalincome, tax benefits, and equity build are all still there. Ifyou are a long term investor you are still seeing a solid return fromyour cash flow, tax benefits, and equity build.

Are we at the bottom of the market now? I don't own thatcrystalball. However, I do believe that if we are not at the bottomweare close. Today's low prices, high rent return and lowinterestrates make it a great time to buy. Realistically, 15-20 yearsfrom, do you think a home you buy today with be worth more or less thantoday's purchase price? Almost certainly everybody wouldanswerthat it will be worth more!

Ifyou missed it Here are the previous installments: