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Robert English's Blog

By ROBERT ENGLISH, President | Agent in 78723

The Ideal Investment

Did you know that the ideal investment is one that has 5 major components in it?  Those 5 components are:

Rental homes can be the IDEAL investment in today's market because they offer a much higher rate of return than alternatives without the volatility of ups and downs in the stock market.

  1. Income
  2. Depreciation
  3. Equity
  4. Appreciation
  5. Leverage

In fact, those same 5 components are an acronym "IDEAL" which serves to identify the advantages of rental properties:

  • Income from the monthly rent contributes to paying the expenses and a return on the investment
  • Depreciation is a non-cash deduction that contributes tax shelter
  • Equity grows monthly as the mortgage amortizes due to some of each payment being applied to principal reduction
  • Appreciation is achieved as the value of the property increases
  • Leverage can increase the return on investment by using borrowed funds to control a larger asset

The combination of these characteristics working together makes rental real estate a very good investment for today's economy and years to come.  Increased rents, high rental demand, good values and low non-owner-occupied mortgage rates contribute to positive cash flows and very favorable rates of return.

Contact me for more information about actual opportunities in our local market.

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