Real Estate: General
This page will show my current holdings and my current ROI and Cash flow on each as well as my approach to real estate investing.
Single Family Rental (SFR) homes in strategic markets at the right price are fantastic investments. Although they are obviously not without risk, the risk profile and real nature of the investment, assuming you do your due diligence, is well worth it to me as part of a longer term diversified real estate portfolio.
The general approach I am taking at the start, is to establish a core base of long term holdings in the SFR, multi-family, commercial, commodities, and ranching segments.
Cash flow is the core determinant for a long term hold. I want to know that I am not dependent on underlying asset appreciation. This is loosely the same view investors take when buying dividend producing stocks.
Any appreciation of the underlying is then icing on the cash flowing cake. Any depreciation is buffered by the diverse business producing arms of such properties and the reliable cash flow they produce.
Property investment moves beyond the simple rent/mortgage premium.
Ranches produce cattle, leasing rights, mineral operations, water income, sporting income, and any number of business opportunities highly dependent on the given property.
Single family homes in strategic areas can ensure that rents stay relatively benign in broader market volatility.
The same can be said for apartments and multi-family units.
Commodities can be monetized in a way that is thoughtful to the land that hosts it.
There is money to be made.
Texas Property 1
One story single family residential built in 2005
Profit on Rent: %24.3
Property Management Fee: 10% of monthly rent
Monthly Profit on rent against mortgage net of fees: %14.3
Home equity contribution metrics:
Through 1 June 2016
27.94% return on total capital expended when the property was used as my primary residence.
This does not include anything over and above the current monthly payment.
The profit on rent is given above.
Appraised Appreciation: +8.986% since loan inception.
This year will move the property across a 2% cap rate against the reducing mortgage.