Consider this very real example:
1240 Morganton Road, Pinehurst is currently listed for sale for $165,000.
Assume:
You can buy it for $158,500 (96% of list price).
You can finance 80% of the purchase price at 4.25%, $126,800 mortgage and $31,700 down payment
Your monthly mortgage cost is $621.60 + $110 taxes + $75.00 Insurance = $806.60 total monthly cost
This home has been listed for rent at $1,300. Your potential monthly net is $493.40
This generates a return on invested cash of 18.6%. Plus you get the tax benefits associated with rental properties and the potential increase in value of the home as real estate prices increase.
This is not a special case, there are hundreds of opportunities just like this across the market. If you have the capacity to qualify for a mortgage, this is a great time to buy real estate for investment purposes. Where else can you get a comparable return while owning a real tangible asset.
This analysis ignores the potentail windfall associated with short term rentals relating to the 2014 US Mens & Womens Opens to be held in Pinehurst. This specific home could rent for as much as $15,000 to $18,000 during this two week event.
Bob
