Return on Investment in Real Estate can give you a nest egg on down the road. Have you ever considered what your Return on Investment in Real Estate might be?
A certificate of deposit will generate a cash flow based on the interest rate that it pays which is the only way it generates a return for the investor.
An investment in a stock that does not pay dividends, would need to be worth more than you paid for it to earn a profit. On the other hand, a stock that paid dividends could make the investor a profit even if it sold for the same price that he paid for it.
Investors can profit four different ways with an investment in rental real estate.
1. Cash flows that result from having a surplus after collecting the rent and paying the expenses.
2. Equity build-up results from a portion of each monthly payment reducing the unpaid balance.
3. Tax benefits can result from the depreciation allowed on the property and the preferential long-term capital gains tax rate.
4. Appreciation benefits the investor when the value of the property increases.
The most conservative investors in real estate make decisions to purchase a rental property based on its ability to generate a cash flow and reduce the mortgage through normal amortization. If the property can offer an acceptable rate of return compared to other available investments, the tax benefits and possible appreciation become an added bonus.
With increased rents and low mortgage rates for investors, rental property can offer significantly higher returns than many of the available alternatives. Contact me for more information, you may be amazed about what is available in the market.
Talk to Jeff Aronheim at Summit Funding, Inc. for more information about investing in Real Estate. 720 200 5654. He can help you understand the financial implications in obtaining rental property and figure out the return on investment in real estate Email – Jeff@aronheim.com
For more information about Denver Colorado Real Estate or homes for sale along the Front Range, call Marilyn Van Steenberg, Dream Home Consultant, Certified Residential Specialist and Eco-Broker.
Specializing in Buyer Representation & Relocation Real Estate Transactions.