Yes, between now and fall of 2009 is a great time to consider investing in rental properties in the Phoenix Metro Area. Let’s look at some of the data and see how you can generate great cash flow in this market. Please note, that appreciation is ALWAYS icing on the cake and that cash flow is the main course!
Finding a great rental property begins by identifying the right area and investment strategy that meets your long-term objectives. So let’s assume that we are investing in a home in Gilbert Arizona. Here are the breakdown in costs for acquiring a 1,600 square foot three bedroom home via auction or foreclosure:
- $150,000 – Purchase Price
- $30,000 – 20% Down Payment
- $120,000 – Financed
- 5.25% – Interest Rate
- $3,000 – Closing Costs
- $2,000 – Fix-Up Costs
- $663 – Monthly Payment
- $140 – Taxes & Insurance
- $100 – Vacancy, HOAÂ & Misc Costs
- $903 Total Monthly Expenses
So, with an investment of $35,000 you can have a property that will generate roughly $200 per month in cash flow (assuming an average monthly rental rate of $1,100). Also, take into consideration the tax benefits and future long term appreciation of the property as icing on the cake.
This is a perfect storm for investors looking to acquire rental homes in Phoenix Metro Area: low housing prices for premium homes at historically low interest rates.
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This is a perfect storm. Anyone with any funds would be crazy not to try to pick up a home. The deals out there are ridiculous. I’m even seeing the difference lo0king at it on the property management side where we lease homes. Our owners who are buying in today’s market are actually cash flowing. We haven’t seen these prices for years. Get buying before it’s too late.