I'm the first to admit that I'm not an educated real estate investor, or investor period... I tend to blow all my money on Porsches, motorcycles and women, not necessarily in that order
But, I have had a rental property for the past 6 years that has performed extremely well. Purchased for $83k and now worth $250k. Rent has increased from $850 to $1250.
Here's my thinking:
$175k house. 20% down. Last time I checked you had to put 20% down if not owner occupied. Finance amount = $140k. 15 year loan at 5.75% = $1,160 per month. Add another $150 for property taxes. $1,310 per month total.
Rent for $1200 for month. $110 per month in red, going to black within 24 months.
Pay off loan in 11-12 years by paying extra payment each year.
Regardless of property appreciation, my main interest is retirement income. I'm 41 now. Retirement income would fully kick in at age 53, with partial income occurring as rents rise during the 11-12 year period.
Any logic to this? Am I being idealistic?