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Where can I find a good calculator to help determine if buying an investment property is a good ROI?

I am thinking about purchasing a home to use as a rental.  We are lucky to live rent free right now and have saved some money to eventually buy a house in 5 years or so.  We want to determine if it is better to put our money in a CD or buy a rental.  Any advice on where we can find a good calculator or tool to help us make our decision?
Thanks!
  • July 17 2009 - Boise
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Answers (2)

Buying a home in Boise as a rental makes sense again.  I started selling mine off a few years ago when the returns didn't make sense, but now that property values have declined and interest rates are low and rents are stable, many home cash flow again very well.

You will find that just the depreciation on a home will exceed the return on a CD.  The best thing to do is check with your CPA since your tax liability and benefit does not fit into a generic online calculator!

With the $8,000 tax credit, I highly encourage you to consider buying now instead of later since if you have no tax liability, you actually get a $8,000 check from the government!  The home affordability index has not been this favorable in decades!

Either way, I can help you now or down the road!

Best of luck!



 
  • July 18 2009
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Congratulations on your decision to invest.  I know that you will find that real estate as an investment completely dwarfs any "investment" in a CD.  Just looking at the effects of inflation alone is enough of a reason to consider real estate.

Regarding your ROI question, be sure you understand how to calculate it first.  Here is a short but helpful article to get you started:  Calculating Return on Investment in Real Estate
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  • July 17 2009
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