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Best Investment for money

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Money Talk > Real Estate

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makoman82
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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
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littleroc02us
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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
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oldguy
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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
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Guppy2
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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
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BrianaWalker
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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
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CandaceKroslak
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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
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Natalia Smith
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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
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jevananurag
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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
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JonCartoon
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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
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donickmard
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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
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Hollyboy
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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
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rburns
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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
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JonCartoon
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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
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zhetrin
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are you ready to get called on odd hours for complaints on home repairs? willing to work out more sweat for small extra cash? wiling to haggle price with tenants or pushing for rents?

if you do then maybe you can get a real estate investment to rent out. My mom did and she was lucky for finding a great tenant. while they haggle everytime contract ends (and I tell you it's such pain in the *ss) they pay on time every month and not much complaints are made. so yeah consider all the above and even much more problems before diving to it. Some people made it big from real estate investment Smile.
Post Wed Oct 29, 2014 6:36 am
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Peppermint0406
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Real Estate  Reply with quote  

For me, real estate is one of the best ways to earn. It could be another source of income especially if one already retire from work. If you own the property, you could have two options , its either to have it rented by others or to use it for your own business. Whatever happens, it is still considered a valuable asset.
Post Thu Aug 04, 2016 6:09 am
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