Wake-Up Money, Secrets to Investing

Most people think of investment property only in terms of monthly cash flow, but that’s just one piece of the puzzle. Even with $0 monthly cash flow, your investment is still working for you in multiple ways:

1. Cash Flow -$0/$65,000 = 0% Return On Investment

2. Leverage -You own $275k of real estate for a $61,875 cash investment

3. Debt Reduction -$2,256 in principal reduction the first year. In essence the tenant is buying you the house and giving it to you at the end of the loan. $2,256/$61,875 = 3.65% Return On Investment

4. Tax Savings -About $8k/year in depreciation.

5. Appreciation -If this house goes up 5% in value this year, it will increase by $13,750. $13,750/$61,875 = 22.22% Return On Investment

$275,000Price
$61,87520% down payment + closing costs
$220,000Loan @ 6.95%; 30-year; fixed rate
$1,456Monthly principal; and interest payments
$294Monthly taxes and insurance payments
$150Monthly reserve for maintenance/repairs
$1,900Monthly rental income
$1,900Total monthly expenses
$0Monthly cash flow

Possible Total Return on Initial Investment (after first year):

0.00%From Cash Flow
3.65%From Principal Reduction
22.22%From Appreciation
25.87%Total Return on Investment

When this property is free and clear, you will have nearly $22,800.00 a year in “Wake-up” money. Of course, by then the rent (and the “Wake-Up” money) will probably be a lot higher, as will the property’s value.

Get help with all of your real estate needs!

Home

Account

Website built by CloseHack.

Listings identified with the FMLS IDX logo come from FMLS and are held by brokerage firms other than the owner of this website. The listing brokerage is identified in any listing details. Information is deemed reliable but is not guaranteed. If you believe any FMLS listing contains material that infringes your copyrighted work please click here to review our DMCA policy and learn how to submit a takedown request. © 2022 First Multiple Listing Service, Inc.

The data relating to real estate for sale on this web site comes in part from the Broker Reciprocity Program of GAMLS. All real estate listings are marked with the GAMLS Broker Reciprocity thumbnail logo and detailed information about them includes the name of the listing brokers. The broker providing these data believes them to be correct, but advises interested parties to confirm them before relying on them in a purchase decision. Copyright 2023 GAMLS. All rights reserved.

IDX information is provided exclusively for personal, non-commercial use, and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. Information is deemed reliable but not guaranteed.

Wake-Up Money, Secrets to Investing​​​​

​Possible Total Return on Initial Investment (after first year):​

​When this property is free and clear, you will have nearly $22,800.00 a year in “Wake-up” money. Of course, by then the rent (and the “Wake-Up” money) will probably be a lot higher, as will the property’s value.

Get help with all of your real estate needs!

Home

Account

Classic MLS

Wake-Up Money, Secrets to Investing​​​​

​Possible Total Return on Initial Investment (after first year):​

​When this property is free and clear, you will have nearly $22,800.00 a year in “Wake-up” money. Of course, by then the rent (and the “Wake-Up” money) will probably be a lot higher, as will the property’s value.

Wake-Up Money, Secrets to Investing

Possible Total Return on Initial Investment (after first year):

When this property is free and clear, you will have nearly $22,800.00 a year in “Wake-up” money. Of course, by then the rent (and the “Wake-Up” money) will probably be a lot higher, as will the property’s value.

Wake-Up Money, Secrets to Investing

Possible Total Return on Initial Investment (after first year):

When this property is free and clear, you will have nearly $22,800.00 a year in “Wake-up” money. Of course, by then the rent (and the “Wake-Up” money) will probably be a lot higher, as will the property’s value.