Last month I posted one success story of clients investing in rental properties. Here is one more example of an everyday person who decided to invest. They bought two properties; one a townhome and one a single-family home. The purchase prices were approximately $120,000 for the townhome and $265,000 for the single-family home, so about $385,000 total. A conservative estimate of value of those properties now is $590,000. That is a $205,000 appreciation. They’ve also enjoyed positive cash flow as a rental since they’ve owned them. In their case, they bought the single-family home as a possible retirement home. If they used an estimated $300 to $500 per month excess cash flow towards principal reduction, they would pay both homes off well in advance of the original 30-year note. That would mean they could live in the free and clear ranch and receive retirement income from the paid off townhome which is currently renting around $1,500 per month. Ask your investment advisor how this type of plan compares with investing $76,000 (the total down payment required to buy both properties) elsewhere. Of course I have to share the disclosure that past performance does not guarantee future results.
I hope these stories I’ve shared over the last two months have encouraged you to consider looking into rental properties for yourself. Having owned one myself, I personally know the value and am looking to add one in the next 12 months. It would be a great time to work side by side with you, helping you find one of your own. Please call me so we can get together and discuss this more.