This is called “Passive Investing”. Many people have full time jobs and want to increase their wealth through investing in residential rental property. This can be done with almost zero effort. Professionals can select a property that meets your goals and manage it. Regular rent deposits into your account and a once per year discussion with a CPA is all that is about all that is required.
View our First Time Investor page and learn more about our program. Click here.
The Dow Industrial Average reported a loss of 3.48% (includes dividends) for 2017. The DOW reported a gain of 17% in 2016. The S&P index reported a 3% gain for 2018.
Our example investment property which is just an example, not selected to be a high or low yield property, indicates a five year return on investment of 42.8%.
It appears that at least with the sample property, investing in residential rental real estate is beating the stock market’s performance.
The later the down payment, the lower the payment. Private mortgage insurance may be required for loans with less than a 20% down payment. This does not apply to VA loans and some other loans.
Your interest rate will be based upon your score. The higher the score the lower the rate. If you have good credit e.g. above 700 and you can obtain a loan without PMI then afford the payment, you may want to put down the minimum. Why?
Your interest rate will probably be below 6%. There are investments that will pay that and more. For example, Real Estate Investment Trusts that can pay over 10% in dividends. There are two basic reasons for putting down less:
Not everyone can make the payment and put money into investments. Not everyone can have the discipline not to spend the invested money for non-emergency items. If you do have the discipline than you will be earning the spread between your mortgage interest payment e.g. 6% and perhaps 10% on your investment which in the example is 4%. This plus subsequent investments can help start a retirement fund.
Our site was created to help our clients find and then buy the home they desire. It’s also created to help clients sell their homes and many who do sell their homes require financial assistance to buy their next home. I have included a document provided to me by Brian Logan from CMG Financial that will serve as a guide to the many types of programs available.
Of course not everyone will quality for every program but Brian assures me that if you want to buy a home and you have issues e.g. less than stellar credit, new job etc., that he probably has a program that will help you.
In fairness to other mortgage providers, Brian is not the only provider of financial services, he however did provide this information. It’s your decision who you want to work with to secure a loan for your new home.
Brian Logan
Loan Officer
NMLS#379959/Branch NMLS#1594850
Cell : (228) 669-3058
blogan@cmgfi.com
Yes, some areas qualify for USDA loans. You should visit the USDA website for complete details for the program and use their site to determine if your income qualifies you. USDA loans are a program provided to rural communities and the primary feature is a zero down payment loan.
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