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    5 reason to love rental properties (& why rentals make sense)

    I have never had much luck with the stock market, although my stockbroker always makes me feel like my retirement plan is doing well. I have averaged 6% to 7% over the last 20 years and that has just recently gone up due to the latest record-breaking years on Wall Street.

    My rental properties, however, have blown my mutual funds out of the water. And, when you consider the small amount of money I put down on many of my properties, my cash-on-cash returns have been off the charts.

    The one thing I warn people about before investing in real estate is to make sure you look at the investment as a long-term hold. If you do not have the extra annual income to fade unpredictable months then make sure you put down enough money on the front end to create positive cash flow to offset future financial hiccups.

     

    Why rental property is a great investment

    LEVERAGE

    You only invest a small amount of money (20% of the price) and the bank gives you a loan for the rest. Rental properties allow an investor to buy much larger assets than they could in other investments such as stocks. Then you let the renter pay them off for you.

    CURRENT LOW RATES

    Interest rates are a critical factor in your monthly cash flow, and remember your rate will typically not change over the life of the loan. When rates are lower, like they are right now, it really gives an investor the advantage in realizing a better return on their investment.

    IT REWARDS HARD WORK

    If an investor wants to leverage their time towards rehabbing the property they will get a reward. The same goes for managing their property or using their networking skills to find under-valued properties. This is very hard to do in many other investments.

    INSIDER TRADING IS LEGAL

    You can go to prison if you buy stock with intimate knowledge of a publicly traded company, but that is not the case with real estate. If you learn of a new corporate headquarters coming to your area and you purchase in that area for higher rent values and appreciation it’s totally legal.

    IT IS STEADY

    People always need a place to live and you can always rent a home, of course, supply and demand can dictate rental rates but you can always rent at some price. It depends on who you talk to but historical data has shown us that real estate appreciates, on average, 4.5% over the last 30 years. If you really want to see the power of investment property over time, go to www.calculator.net and plug in your numbers. It is a fantastic investment property calculator that shows you cap rate, cash on cash return, internal rate of return, and other useful charts to help you quantify an investment in real estate.

    Search for Investment Properties at murfreesborohomesonline.com

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    John Jones

    John Jones knows Middle Tennessee and he knows real estate. Born and raised in Murfreesboro, John brings a life of local experiences and 21 years of experience in the real estate industry to his clients. He’s helped over 3,300 families handle their real estate needs. Before opening his own brokerage firm, he was a perennial top producer for Coldwell Banker, consistently ranking among the top 1% of agent in the nation. John and his team have also received numerous awards and recognitions for top sales performances in the state as well as nationwide from the Star Power organization and The Wall Street Journal. In October of 2008, John realized his vision of a small boutique real estate firm that went beyond tradition and provided cutting edge tactics that offer the best in customer service, market knowledge, wealth building opportunities, and innovative techniques that get homes sold. To open a new business just before the housing crisis and not only survive but also grow is a tremendous testament to the connections John has within Murfreesboro and Rutherford County. His company now has over 15 team members who share his goal in serving his hometown. John has been married to his wife, Tracy, for over 20 years. They have four children, Jack (19), Pruitt (16), Liza Jane (14) and Mary Margaret (10). The Jones family attends World Outreach Church. John loves all sports and enjoys spending time watching his children compete. He has one son who plays football for The University of Tennessee, another finishing up his senior year at Oakland High School, and both daughters play basketball for Providence Christian Academy. The Jones family also enjoys spending time together on Center Hill Lake.

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