YES!
2024 UPDATE: We already stated that owning a rental home is a great investment. A 20% return after taxes is possible with professional property management and all expenses covered.
But what if the numbers get really bad? Is it still a good investment?
YES 11% RETURN ON INVESTMENT with negative Cash Flow
(Price and rent appreciation, fixed payments, pay down principal) … + tax advantages
Hint: Call Real Property Management Rio Grande at 505-292-4765. https://www.rpmriogrande.com for the answer!
The Best in Albuquerque Property Management
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Hypothetical Math Example (all numbers for example only)
Let’s say you own a $300,000 home in Albuquerque with a $30,000 down payment
monthly payment on 30 year mortgage. This comes with a 6% mortgage rate, not being the best, with $1,950 a month.
There are $330 in taxes and insurance per month
Rent is $2,100, BUT we’ll add 5% vacancy to make it worse
Albuquerque Property Management Fees are 10% per month.
Property expenses like repairs and maintenance are $1,200 per year… but let’s add 50% increase to that and make it $2,000 per year.
Your cash flow is now – $325 per month… which might seem very tough to handle.
However, your return on investment (ROI) on the initial $30,000 downpayment over 20 years is greater than an 11% return, this is even with very bad example numbers, vacancy, overly high expenses, etc.
Not too bad!
For more details on returns: https://www.calculator.net/rental-property-calculator.html
Note: if you don’t use professional management like RPM, you wont get the rent, appreciation, or protection of your investment that you deserve!
Mark Webb
Real Property Management Rio Grande
505-292-4765