Home     Forum     401k     401k Rollovers
    Register   Login   Members   Search   FAQs     Recent Posts    




Best Investment for money

Reply to topic
Money Talk > Real Estate

Author Thread
makoman82
First Time Poster


Cash: $ 0.25

Posts: 1
Joined: 10 Jul 2013
Location: Louisiana
Best Investment for money  Reply with quote  

Hello everyone. My wife and I will be getting back some money late this year that we lent to a family member. Approximately $25,000. I have a question as to whether the following is a wise investment of the money.

We live in an area where single family home rentals are few and very sought after. Most rentals in this area are large apartment complexes. Rent for a single family home goes for about $1 a square foot/month. We could use the $25,000 as a down payment to purchase an approximately 1,200 to 1,300 square foot single family home in either the 2nd or 3rd best school district in our area. These properties rent quickly to young small families and stay rented. I calculate that after mortgage, taxes and insurance, we could stand to profit around $500/month off of the rent of the home. Does this sound like a wise investment for the $25,000 or do you think there are better options? Thanks!
Post Fri Jul 12, 2013 1:59 pm
 View user's profile Send private message
littleroc02us
Moderator


Cash: $ 381.25

Posts: 1876
Joined: 09 Feb 2009

 Reply with quote  

Is Landlording something you've been dreaming about doing for years or are you envisioning more of an investment that is long term? The reason I ask is renting isn't as simple as collecting checks. I am a handyman for a couple rentals and I get calls at different times of the day and week which can be a hassle. Plus when the water heater breaks and your the owner you'll need to cough up the money out of pocket. My brother in law bought a rental in Minneapolis for me to take care of and he won't make a profit in his first year of ownership, because the repairs have been numerous. Think about why you want to landlord and if it isn't your cup of tea, then maybe look into long term investing because 20k @ 8% for 30 years is 200k if you don't add anything else.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Fri Jul 12, 2013 3:08 pm
 View user's profile Send private message
coaster
Senior Advisor


Cash: $ 1626.30

Posts: 7990
Joined: 11 Oct 2005
Location: Wisconsin
 Reply with quote  

Your expenses will be considerably more than mortgage, taxes and insurance, so your net cash flow (profit would also include your capital gain in the property) will most definitely not be the $500 a month you've calculated; you might want to recalculate that including maintenance, improvements, *liability* insurance, lost rent, advertising, etc.

But....it seems you've identified a need / market demand where there is a lack of supply, and that's the first step toward a successful investment. So, take the above post in mind, and if you really want to be a landlord, then I think you've spotted a good opportunity to get a start in that career.

Best wishes and good luck. Wink

~Tim~
Post Fri Jul 12, 2013 3:25 pm
 View user's profile Send private message
oldguy
Senior Member


Cash: $ 717.80

Posts: 3491
Joined: 21 May 2006
Location: arizona
 Reply with quote  

quote:
I calculate that after mortgage, taxes and insurance, we could stand to profit around $500/month off of the rent of the home.


Are you are looking at a $125,000 house with a $100,000 mortgage? Non-owner-occupied loans have about a 5.5% interest rate right now (about 1.5% more than OwnerOcc). If the profit is $500/m, that will add about $1200/yr to your income tax bills. But your depreciation schedule will get you about a $3600/yr depreciation write-off, that saves about $700/yr for you. (Note: be sure to file that every year, when you sell the IRS will bill you for depreciation even if you don't claim it).

I'm a landlord, sounds like you have identified a good region, one that could make money if the value of the houses appreciate. But it's not a hobby, you have to learn the Laws, tenant/landlord rights. Maximum deposit laws, tax laws, eviction laws, etc.

And the First Rule of landlording - don't rent to acquaintances, friends, co-workers, co-workers kids, and never ever to a relative - you need a formal arm's length agreement with a stranger. And never allow a enter to do work for you in lieu of rent. They seem like simple rules but nearly every landlord has fallen into those traps more than once. Very Happy
Post Fri Jul 12, 2013 4:51 pm
 View user's profile Send private message
coaster
Senior Advisor


Cash: $ 1626.30

Posts: 7990
Joined: 11 Oct 2005
Location: Wisconsin
 Reply with quote  

Ah, yes ... depreciation on an investment property ... as a tax deduction to figure into the net-net ... great call!! Thanks!! Very Happy

There ya go, makoman. You just stick around here and this oldguy will teach you everything you need to know about landlording. Wink

~Tim~
Post Sat Jul 13, 2013 4:48 am
 View user's profile Send private message
Guppy2
Contributing Member


Cash: $ 8.20

Posts: 36
Joined: 26 Jun 2012
Location: Fullerton, CA
 Reply with quote  

Sorry but the first thing you should worry is if you can get your "$25,000" back from your family member.
Post Thu Aug 08, 2013 6:58 am
 View user's profile Send private message
BrianaWalker
New Member


Cash: $ 0.80

Posts: 4
Joined: 29 May 2013
Location: USA
 Reply with quote  

Real estate will be the best investing option according to me. It have great ROI and security of attaining a good amount of profit.
Post Wed Aug 14, 2013 12:08 pm
 View user's profile Send private message Visit poster's website
CandaceKroslak
New Member


Cash: $ 2.00

Posts: 7
Joined: 25 May 2013
Location: Australia
 Reply with quote  

I think real estate is one of the best and smart investment because rate of interest is high and one will never regret after investing in it. But before investing in it one must have knowledge about various facts related with it.
Post Thu Aug 22, 2013 5:47 am
 View user's profile Send private message Visit poster's website
Natalia Smith
Member


Cash: $ 2.40

Posts: 11
Joined: 26 Sep 2013

 Reply with quote  

There are various alternative in which you can invest. I will suggest you real estate. Real estate is one of the smart and lucrative investment. One will never regret after investing in it as ROI is high. But before investing in it you must have knowledge about various fact. For that you can take help of real estate agent.
Post Mon Dec 23, 2013 8:27 am
 View user's profile Send private message Visit poster's website
jevananurag
New Member


Cash: $ 1.20

Posts: 5
Joined: 03 Jul 2014

 Reply with quote  

In these days, Many of them are investing their money in real estate because it is the most profitable source of investment money and get the profitable results in a very less time.

south beach real estate
Post Thu Jul 03, 2014 5:07 am
 View user's profile Send private message
JonCartoon
Preferred Member


Cash: $ 27.35

Posts: 135
Joined: 18 Jun 2014

 Reply with quote  

I think, dont hurry. read laws, find people whose can help in unpredictable situation. and better, if that not be your wife=)
Post Thu Jul 03, 2014 12:29 pm
 View user's profile Send private message
donickmard
First Time Poster


Cash: $ 0.20

Posts: 1
Joined: 12 Jul 2014

 Reply with quote  

Real estate is the most leading concept in the business world. Investing money in real estate is very profitable. If we had certain basic knowledge about the present market then our work becomes easy.

house cash sale
Post Sat Jul 12, 2014 8:18 am
 View user's profile Send private message
Hollyboy
Full Member


Cash: $ 10.20

Posts: 50
Joined: 14 Jul 2014
Location: US
 Reply with quote  

without a good partner you have nothing. I advise you to study further the problems that you may encounter, and only then start to take that either
Post Mon Jul 14, 2014 12:59 pm
 View user's profile Send private message
rburns
Member


Cash: $ 1.50

Posts: 21
Joined: 23 Aug 2010
Location: New York City
 Reply with quote  

Being a Landlord can take more money out of your pocket than the rent may put into it. It may seem that the liabilities are endless and they must be insured against.
Post Wed Jul 16, 2014 8:06 pm
 View user's profile Send private message Send e-mail
JonCartoon
Preferred Member


Cash: $ 27.35

Posts: 135
Joined: 18 Jun 2014

 Reply with quote  

quote:
Originally posted by rburns
Being a Landlord can take more money out of your pocket than the rent may put into it. It may seem that the liabilities are endless and they must be insured against.


you write one negative, no offense
if we do nothing then nothing ever happens
Post Thu Jul 17, 2014 1:51 pm
 View user's profile Send private message

Goto page 1, 2  Next
Reply to topic
Forum Jump:
Jump to:  
  Display posts from previous:      





Money Talk © 2003-2016