# 1 Reason. Buying at a discount: You can buy distressed properties at a discount, fixing them up and having a handsome equity before the property is even placed as a rental. This equity is the first way you grow your wealth as a result of investing in single family rental real estate. For example, if you bought a property for $80K, spent 10K in closing, holding and rehab costs and the property appraises for $130K, thatâ€™s a 40K increase in your net worth for fairly minimal amount of work.
# 2 Reason. Cash Flow: If you rent your property at the right price you should be able to cover your mortgage, property taxes, insurance, warranty, maintenance, marketing and vacancy costs giving you a positive cash flow every month. For example, say rent is $1,300 rent, and you have a mortgage payment of $650 , $200/month in taxes, $90/month in mortgage insurance & warranty, also include $100 for vacancy and incidentals, that gives you a $260 positive cash flow every month with little to no maintenance.
# 3 Reason. Self Hedge Investment
You can get good deals when you buy in a buyerâ€™s market. Many renters are looking for a good rental property at a great price. So when you have many potential renters looking in a certain areas "rents go up", and your cash flow goes up.
When itâ€™s a sellerâ€™s market and every oneâ€™s buying, not many are renting. Rents start going down. Your cash flow goes down. But, your property value goes up. Your single family rental homeâ€™s value is high. Not because it is an income producing asset but because it is a home â€“ something that someone wants to live in. So you may be able to sell it for a handsome capital gain or refinance and pull some cash out to offset for lower cash flows.
So, regardless if the market is up or down, if it is done right your single family rental home can be a great investment.
To find out more about investing visit www.delvalproperty.com
Mike Lautensack is the owner of Del Val Property Management, LLC a FULL service residential property management company located in Philadelphia, PA. Mike advises real estate investors how to build wealth and financial security through hassle-free ownership of investment real estate with their "Total Property Management Program." This proven management system allows owners to enjoy the financial benefits of cash flow, tax savings, and wealth creation while it GUARANTEES you will never receive a late night emergency call, deal with a lengthy eviction proceeding or ever have to interact with an irate tenant. For a FREE estimate or or more details how he may be able to you please got to Del Val Property Management, LLC