Return On Buying A House

By
Managing Real Estate Broker

The reason the largest investment houses in the Country are buying houses by the hundreds is the return simply makes sense.

Real Estate is having a 50% Off Sale going on RIGHTNOWand that means IT’S TIME TO BUY.

There may never have been a greater time to buy with property values having come off previous High Values to such Low’s while at the same time Interest Rates have done the same.

A $500,000 House just a few years ago is now a $250,000 House.   But that’s only part of why you should start making offers on houses right away.

The other half of the equation is what that $250,000 House, that’s 50% Off will cost you monthly.  We buy houses with a monthly payment so let’s look at what that monthly payment would look like.

 

            $250,000 Purchase Price

            3.5% 30 Year Fixed Rate Mortgage - Cookie Cutter 30 Year Loan

           

            4.125% Fixed 30 Year Mortgage Investors. 

Lenders charge slightly higher rate for investment property loans. 

           

Owner Occupied:        

 

Down Payment             Mortgage Payment       Taxes/Ins.         Total Payment

 

            3% Down         = $7,500          $1,090                         $285 Mo          $1,375

 

            10% Down       = $25,000        $1,010                         $285Mo.         $1,295

 

20% Down       =$50,000         $895                            $285Mo.         $1,180

                                                           

           

Investor 25% Down

 

Down Payment             Mortgage Payment       Taxes/Ins.         Total Payment

 

            25% Down = $62,500             $910                            $285 Mo          $1,195

 

The way to tell if it’s a good investment is to figure out how much cash out of pocket you would be investing.

 

            In this case it would be the down payment plus about 3% closing costs:

                        Example:  $50,000 Down + 3% Closing Costs = $7,500  Total: $57,500

 

            Invest $57,500

 

            Rental Income: $2,000 Per Month +- =                                    $24,000 Per Year

 

            Less Mortgage Payments, Property Taxes & Insurance =            $15,540

 

                                                                                    Net Income:     $8,460

 

                        INVESTMENT:           $57,500                      

                                   

                        RETURN:                    $8,460

 

                        RETURN ON INVESTMENT: 15%

 

 

            Call me at 707-578-2250 or Email me: Delas7aol.com

 

                        Thanks!   Scott Wolmuth, Broker “Scott The Broker”

                                   

 

            This simple reference equation does not consider:

            Appreciation Or The Increase Of The Investment in Value over Time

            Deprecation or the Tax Benefits and Write Offers

            Vacancy which in this Area is 5%+-epairs and Maintanance which we would consider to be offset by other Benefits

 

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