Twin Cities Property Finder · David Olson, Broker · MN #BK3603584 · Whitefish Property Finder · MN #40646463 · Licensed in Minnesota, Wisconsin and Florida
Rental properties have four primary factors that contribute to a return on investment. Based on market conditions and investor strategies, the individual motivating factor can change for property owners.
Here’s what to know, whether you’re selling, buying or just curious.
Here’s an honest look, whether you’re selling or buying.
What to know
There was a time when the benefit of tax savings to offset income from other sources was considered important to some investors. However, in today’s environment, they are more likely valued as incidental benefits.
Some investors expect appreciation to deliver the satisfactory results which can be reasonable over time if a reliable appreciation rate is used. Savvy investors today are using conservative estimates for long-term holding periods.
Leverage occurs when borrowed funds are used to control a larger asset. Positive leverage can actually increase the yield on an investment.
More details
The fourth component that contributes to a property’s yield is the cash flow. When the rents are greater than the expenses of operating the property and servicing the debt, there is a positive cash flow. A property with a good cash flow doesn’t have to go up in value to justify the investment.
The combination of lower prices, incredibly low mortgage rates and rising rents are attracting investors to rental properties that include single-family homes in predominantly owner-occupied neighborhoods.
Even if you were to ignore the benefits of tax savings, potential appreciation and leverage, the attractive cash flows make rental property a very smart investment alternative. If you’re curious, contact me for more information.
A simple plan for your move
I’ve been helping people sell and buy homes across Minnesota, Wisconsin, and Florida for about two decades, and I build and remodel luxury homes too. I’ll help you see both what a property is and what it could be.
Getting the house ready, or making it yours
If you’re selling and want repairs handled before buyers see them, Super Crew Contractors can give you an estimate. If you’re ready for something custom, Ivy Lane Homes does luxury home building and remodeling. And a quick coverage check with Intrinsic Insurance before closing can save you a surprise. Ready to talk? Start a buyer plan or ask what your home is worth.
Super Crew Contractors, Ivy Lane Homes and Intrinsic Insurance are owned by David Olson; you are free to use any contractor, builder or insurer.
Your next step
Every move is different. Whether you’re selling or buying, I’ll help you make a plan that fits.
Please note: I don’t handle rentals or property management. I work with sellers and buyers, and that’s where I can help you most in the Twin Cities.
Stay close to the market, without the noise.
Every so often I send a short, practical note: what Twin Cities homes did, prep tips that are worth the money, and neighborhoods worth a look.
Thank you! You’re on the list.
I’m glad you’re here. A quick confirmation is on its way to your inbox. Whenever you want to talk about your own home or a move, I’m a call or text away.
