NEW UPDATE: We already stated that owning a rental home is a great investment. 20% return after taxes is possible with with professional property management and all expenses covered.
But what if the numbers get really bad? is it still a good investment?
Hint: Call Real Property Management Rio Grande… 505-225-2812. https://www.rpmriogrande.com for the answer
Simple math hypothetical example (all numbers for example only):
165,000 home in Albuquerque
30000 down payment
monthly payment on 30 year mortgage at 5.5% (not a good mortgage today)
$200 taxes and insurance
Rent is 1150. BUT we’ll add 10% vacancy to make it worse
Property Management Fees are 115 per month.
expenses for the property (repairs, maintenance) are 1700 per year… but lets add 50% to that and make it $2500 per year.
We’ll say the rent only goes up 1% per year vs 3% planned
We’ll say Values only go up 2% per year vs 3-5% planned
your cash flow is now -250 to -300 per month… tough to handle I know.
But your ROI on the initial 30000 is still 4000-4500 per year after taxes.
>10% return with very bad numbers, vacancy, overly high expenses, etc. Not too bad
more details on returns
Note: if you don’t use professional management, you wont get the rent, appreciation, or protection of your investment that you deserve!
Mark
Real Property Management Rio Grande
www.rpmriogrande.com
505-292-4765