Friday, October 20, 2006

ROI on Investment Property

There's an interesting post at 2Million about calculating the return on investment for a property that he lived in but now rents out. I've considered this as an option with the condo I'm buying, if there comes a time when I'd rather live somewhere else. But as 2Million points out, unless you can manage the place yourself and be your own handyman for small jobs, your return might not be that great. Every situation is different, and of course the state of the real estate market also comes into play-- right now, I think it's a good time to focus on having positive cash flow for an investment property, as the days of flipping for a fast buck are gone, at least for the next few years...


Anonymous said...

I'm thinking of doing the same thing. I have a small house near a large university and feel there will always be a demand for it.

I like the idea of having a source of income that goes up with inflation and is not connected to the stock (or bond) market. It feels like a good way to not put all your eggs in one basket.

Anonymous said...

Good thinking on your condo - when I first purchased my rental property - I had one eye towards renting it out although that wasn't the reason I bought it.

When I recently purchased my new home - I did the same thing - when I was looking at properties I always looked at the "rentability" features of the house.