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/biz/ - Business & Finance

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15282236 No.15282236 [Reply] [Original]

i just did a quick ROI calculation from rental income, and it came out to be less than fucking 1%! WHAT THE FUCK???? something is wrong here. someone plz check my math

>> No.15282249
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15282249

here's a screenshot

>> No.15282387

anyone? man this board is dead

>> No.15282503

Looks like you're in a competitive market with your rent income. People have to put a larger down payment in a more competitive market, which people do because they aren't doing anything better with their money.. Where I am, I can find a place that produces $3,000/mo income with a similar home price. Your math is right. In the market you're in and base circumstances, you have to look at increasing your home value through renovation or hope it increases through other factors in order to get into a profit.

>> No.15282534

>>15282236
Because you build equity instead of paying my REIT divvies, probably.

Please keep renting.

>> No.15282559

>>15282503
i'm looking at a 3br townhouse and planning on renting out 2 for $1000 each. man i did not expect the return to be less than fucking 1%. yes like you said the main return comes from leveraged principal appreciation. rental income is shit!

>> No.15282560

>>15282249
Who in their right fucking mind rents out a 400k house for 2k a fucking month? Am I reading that correctly? Rental value is roughly 1k per 100k home value per month on average.

>> No.15282569

>>15282236

Yeah looks like a bad deal. 500k and only 2k a month in rental income.

In my market, I can find 200k homes that produce 2k a month (although those are rare and require work to get to that point).

Your area might have better appreciation long term tho, however that's speculation

>> No.15282589

>>15282560
>>15282569
thank you i see that's my issue. i plugged in 3k (1k for each br) and the ROI makes more sense now.

>> No.15282632
File: 33 KB, 876x511, Capture.png [View same] [iqdb] [saucenao] [google]
15282632

pic is the ROI from renting out the entire house. blue is from rental income, orange is from home appreciation (assuming 4%), and grey is total. why would anyone not buy a house? :)

>> No.15282652

The real reason to buy a house is to lower your upkeep. You don't pay income tax on money saved. So the house you live in (which should be small and suited to your needs) is the best value house.

>> No.15282684

>>15282652
hmm i want to disagree. i think one should buy as much house as possible. the more money you borrow at today's low interest rate, the more money you earn from principal appreciation + rental income.

>> No.15282716

>>15282236
>>15282249
>mortgaging a house and then renting it out
Don’t know seems extremely retarded to me. My uncle paid off his house and is just now renting it to make some money to pay for his mortgage on his new bigger house.

>> No.15283071
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15283071

>>15282236
Here is the secret anon , since the fall of the gold standard things that have low inflation like houses (or now bitcoin) , have been a hedge against inflation.

Housing should be for having a family but they became an investment because they win value against inflation.
Bitcoin should be for transactions but became a hedge against inflation too.

Civilization already fell , we are living in the aftershocks of that event , crypto will break the housing bubble now , since milenials can't buy the houses the smart milenials with money will protect their wealth with cryptos and housing will lose value fast.

Quantitative easing starting again now will only make things accelerate more.

>> No.15283129
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15283129

>>15282236
This is my jam. Currently have 3 rentals under these circumstances. First, this is not a good opportunity if that's all the rent you can get. When I was buying, I wanted to aim to break even on cash flow right out of the gate, because maintenance and vacancies are outside of your control (mostly). So even if the rented place breaks even on cash flow, it will still be a drain because of those items. You need to understand that this is a LONG game. You ROI in the first year, or even 5 is not why you enter this business. The ROI in 10, 15 or 20 years is. Consider that if your rent goes up 10%, your income just went up 33%. Your main expense, the note, will stay the same. One day this investment will print easy money for you, but you have to be patient.