A Good Start?
I've got some questions on a possible investment property. I am just starting out in real estate investing and would like to take things real slow to start out. I've read lots of posts on this site and I'm a little confused about the qualifications for a "good investment." At the moment, I do not have any interest in getting involved in fixer uppers, nor do I have any interest in flipping properties. Right now all I am really looking for is a good single family home that will be a long term investment, not to get rich quick. While I intend to have enough cash flow to cover vacancies and repairs, I'm not really looking to make much money on a monthly basis off this property. Instead, I intend to make money over the long run through appreciation.
In addition the market that I reside in and am interested in investing in is pretty highly priced, with single family homes going for anywhere between 120 - 160K. A property that I am looking at I could probably get finananced with a PITI of around $625 and rents would probably be somewhere between $750 - 900. I've read lots of times on this website that rents should be at least 1% of the value of the home. Unfortunately, for single family homes in this area the market just won't support that. I'm sure that there are a lot of investors out there who would tell me that this is not a good deal (based on their investing strategy), but I'm wondering if someone can look at this through my eyes as a long term investment and tell me if this is something I should pursue. As I mentioned before, I'm not ready for the complexities of fixer uppers, flipping properties or foreclosures. I know that this particular property has appreciated 6.6% per year since 1999.
Thanks for any advice you can offer!
I think that as long as you cover possible expenses such as profit of 200 month to cover anything you may have to fix on the property over a long period of time and the possibility of haveing the property be vacant once in a while. As long as you break even that way and keep it for a long time 10 years or more you should be fine. Good to see someone from madison,wi. Do you go to the investment club meeting.
Nathan
When looking at long term investing and the returns you should look at the following:
your age, Years you want the mortgage for, If the property values are increasing so will the taxes. are you taking a fixed rate, adjustable, income.
REI has many avenues as you said you will here many opinions. Your financial planner would be the person to see if this fits into your present game plan. You have many well thought out plans. You can just break even for a winner in the future he or she will tell you that.
Keep up the good work
Lori