Looking Closer at Investing


Looking Closer at Investing
By Scott Rogers • May 2, 2017
Yesterday, I was commenting on the market demand for well maintained rental properties for non-students in the City of Harrisonburg. I had pitched these general assumptions... Purchase Price: $150,000 Down Payment: 20% ($30,000) Interest Rate on 30 year Mortgage: 4.5% Monthly Payment: $740 (principal, interest, taxes, insurance) Rental Income: $1050 Property Management: -$105 Association Dues: -$50 Mortgage Payment: -$740 Net Cash Flow: +$155 I had several follow up questions from you all yesterday, so I thought I'd provide a slightly more detailed view of this theoretical investment.... This analysis shows a much fuller analysis of the potential investment, including these assumptions: $150K purchase price Assumption of 2% per year appreciation 80% financed at 4.5% over 30 years $1,050/month rental income with half a month of vacancy per year $500/year in repairs $50/month in association dues 10% management fees In the first year, this investment would potentially result in.... Positive Cash flow of $818 (benefit seen immediately) Tenants paying down the mortgage by $1936 (benefit seen later) Tax savings of $747 assuming 25% tax bracket (benefit seen annually) Appreciation of $3000 Thus, a benefit of $6,501 in year one. Over the first five years, this would potentially result in.... Positive Cash flow of $6,600 (benefit seen immediately) Tenants paying down the mortgage by $10,610 (benefit seen later) Tax savings of $2,875 assuming 25% tax bracket (benefit seen annually) Appreciation of $15,612 Thus, a benefit of $35,698 over the first five years Let me know if you have questions about any or all of this, as each investor and investment scenario will look a bit different. All that said, I believe there is a reasonable opportunity for a solid return when buying an investment property in Harrisonburg -- and I'd be happy to help you with that process if you are interested. Receive Updates by Email Recent Articles: There Are Plenty Of Types Of Houses That Exist That Just Are Not Available To Purchase Home Sales By Price Range In The City Of Harrisonburg Are You Compromising On Aspects Of Your Next Home That You Can Or Cannot Change Later? How Much Slower Are The Winter Months In Our Local Housing Market? Rockingham County and New Home Sales Drive Surge in Area Housing Market Find The Balance Between Optimistic And Realistic Home Pricing Room Size Is Difficult To Understand Solely From Real Estate Photos How Much Would You Value Not Having To Prepare Your Home For Showings? One Out Of Four Homes Is Taking Longer Than A Month To Sell Consider The Cost Of Your Planned Renovations When Planning Your Offer
Have any questions? Contact Scott Rogers at 540-578-0102 or scott@funkhousergroup.com
Based on information from the Harrisonburg-Rockingham Association of REALTORS® or its MLS, for the period Jan 1, 2000 through Nov 21, 2024 (unless otherwise noted).
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