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The Water Cooler
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Best Interest rates or Investment ROI?
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<blockquote data-quote="tranger2" data-source="post: 2685142" data-attributes="member: 10076"><p>I researched a true life example...</p><p> </p><p>If you paid $103k in 2009 and the county has today's value at $117k. </p><p>If the house rents for $1k/month, then $12k annual. Property taxes on that property is $1300 year, Insurance = ? (I will assume $1000 year, no clue).</p><p></p><p>Assumptions:</p><p>Paid cash for the house, no mortgage interest incurred.</p><p>The house never sits empty.</p><p>No repairs</p><p></p><p>Then:</p><p>You have an unrealized gain of $14K over 5 years. (2.8% avg growth per year)</p><p>You have an annual realized gain of $9,700 ($12k rent - $2300 ins and taxes) for 9.7% annual return. </p><p></p><p>Pros:</p><p>Did not account for depreciation.</p><p>Can write off business expense for tools, mileage, etc.</p><p></p><p>Cons:</p><p>Major expense could hit = HVAC goes out, pipes burst, etc</p><p>Could get a renter from hell or house sits empty for a while.</p><p></p><p></p><p>What have I missed?</p></blockquote><p></p>
[QUOTE="tranger2, post: 2685142, member: 10076"] I researched a true life example... If you paid $103k in 2009 and the county has today's value at $117k. If the house rents for $1k/month, then $12k annual. Property taxes on that property is $1300 year, Insurance = ? (I will assume $1000 year, no clue). Assumptions: Paid cash for the house, no mortgage interest incurred. The house never sits empty. No repairs Then: You have an unrealized gain of $14K over 5 years. (2.8% avg growth per year) You have an annual realized gain of $9,700 ($12k rent - $2300 ins and taxes) for 9.7% annual return. Pros: Did not account for depreciation. Can write off business expense for tools, mileage, etc. Cons: Major expense could hit = HVAC goes out, pipes burst, etc Could get a renter from hell or house sits empty for a while. What have I missed? [/QUOTE]
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