I don’t know about the rest of the country, but Minneapolis turns out to have a red-hot housing market. I sold my home in just four days and got my asking price–which was several thousand above what I would have asked just a year ago.
That means I’m going to have some cash to invest. And I’m thinking about investing in rental property. There are some serious advantages. Cash flow is one. One article said you should look for a 1% return. In other words, if I invest $100,000 I could make $10,000 a month. There is no other investment that could say that.
There are also some tax advantages–you can depreciate the building. That could be a plus if you live in one of the states where Social Security income is taxable and you want some offset.
There are downsides, of course. Stocks and bonds won’t call you at 4 a.m. with a clogged toilet. And the folks who say you can get 1% a month also say you should keep 6 months expenses in reserve in case there’s a pricey repair or a long vacant period.
I’m not going to sign a purchase agreement anytime soon–not until I have cash in hand. But I’m certainly going to do some more research. Stay tuned!