Is this the time for Real Estate Investments?

By
Real Estate Agent with Realty Executives Elite

With prices and interest rates at the lowest in years, is this the time to invest in Real Estate?  To answer that question we should look at a few figures.

There are a number of duplexes available in the Milwaukee area in the price range between $40,000 to $70,000.  Interest rates for investors may range from 6% to 8%, depending on the Buyer's credit score. 

This example will use a $50,000 duplex with 20% down and a 6% interest rate.

A $50,000 duplex investment will require a $10,000 down payment with about $2000 in closing costs. When $40,000 is financed the monthly payments will be around $240 per month.

Taxes on this investment will range from $200 to $300 per month.

Interest and taxes will come to about $540 per month. 

Monthly income can be expected to be around $650 per unit, $1300 total.

This will be a net monthly income of around $760. 

This does not allow for maintenance, closing costs and other expenses, such as repairs required, and insurance.

If the property will be owner occupied, the owner must live in one of the units.  The down payment may be as low as 5%.  On a $50,000 duplex the down payment would be around $2500, plus closing costs of about $2000. 

Owner occupied properties may get an interest rate of around 5%, as of August 2010.  When financing $47,500, the monthly payments would be around $250 per month plus taxes ($300), for a total of $550.  This may be less than paying rent yourself.

If you are collecting $650 per month for the other unit, your income is around $100 per month to use for maintenance, insurance and other expenses.  It is almost like living in your own property for free.

For more detailed information an accountant or attorney should be consulted.   

Posted by

Ez1Realty Menomonee Falls Real Estate

I give customers and clients a service none of the national web sites will ever offer.  I will be with you from the day you List your home, or begin your search all the way to a successful closing.  Fulfilling all your Real Estate needs in Menomonee Falls, Milwaukee, Waukesha, and Washington County areas with the highest degree of expertise and technology.  

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