Getting Retirement Income From Rental Properties
Posted: Wednesday, July 22, 2009
by Haazim Ali
http://www.chicagocitywholesalers.com
Whether you have a 401k or other retirement plan, income from a rental property can make your later years more enjoyable. The real estate market is a "buyers market today meaning you can get great buys today. Chicago homes for sale will no doubt include the following two best buys today:
Chicago Bank RE0's Chicago Preforeclosures (short sales) The above two buys can be obtained at wholesale prices.
This is where the owner of a house stops making their mortgage payments to the bank, the bank forecloses on the property, then seeks to sell the property via auction, the property is not sold at the auction, thus the property goes back to the bank at this point it is a Bank REO(Real Estate Owned).
Banks who do like to own properties, so they will sell them at greatly reduced prices. Great way to get a great deal .
Preforeclosures (short sales) This is where the owner of a house stops making their mortgage payments to the bank, the bank then begins foreclosure proceedings on the property. Before the property goes to auction, a prospective buyer can negotiate a short sale (pay significantly less than the current mortgage) with the bank and own a home for significantly less than the mortgage or present market value.
Positive Cash Flow You heard that saying the "cash is king" well that is what you should be looking for in a rental property, you want positive cash flow which means you want you monthly income to exceed you monthly expenses. I would suggest a minimum of $500 per month on a single family home rental and more on a multi unit.
Appreciation and Depreciation!
I caution all newbie Chicago investors and rehabbers, do not buy a rental property for strictly appreciation and/or depreciation. Make sure it has a positive cash flow first and utmost or you could suffer financial loss owning your rental property.I live in Chicago so I always buy first for positive cash flow and look at the appreciation and depreciation later.
Some things to consider when looking for a rental property:
Good location. Rents tend to be stable in good neighborhoods.The location should be not too distant from where you live now.
Buy property at a discount,a make sure the rents cover all expenses.
Find a property that's not too old so it will comply with building, zoning, and fire codes. And it will have lower maintenance costs. Have it inspected.
Locate a good handyman who can do many of the repairs cheaper than a licensed contractor .
Go to www.chicagocitywholesalers.com the premier online community for real estate investors, rehabbers, and landlords.
Haazim Ali, CPA is the President and Founder of www.chicagocitywholesalers.com the online leader for real estate education and networking. Along with Haazim is his son, Amin Ali, Vice President of Acquisitions and another contributor to our real estate eduction and networking community.
This Article has been viewed 108 times. (Not updated in real-time.)
No comments yet.We want your comments! If you can read this, you don't have javascript enabled, so you can't use this comment system. Please enable javascript.