With its monthly rental income and possibility
of property value appreciation, the allure of owning rental property may have you considering becoming a landlord.
It suffered from surprisingly low rental price and
property value appreciation in Q2 2015 - 1.94 percent and 3.67 percent, respectively - that were both significantly below their respective national averages.
Property value appreciation occurs mainly as a result of market forces and supply shortages, capital improvements, better management, urban infrastructure improvements and developments that make the location of a property more attractive.
Impressive annual job growth (3.91 percent, the fourth - highest in the U.S.), moderately low vacancy rates (4.00 percent, 14th - lowest in the U.S.), and
steep property value appreciation (8.95 percent, 11th - highest in the U.S.) also indicate how exceptionally strong demand currently is for Seattle housing.
The attractiveness of Austin's housing market is largely attributable to its phenomenal
annual property value appreciation rate of 9.85 percent, the fifth - highest increase for that metric and almost twice that of the national average.
Metro areas can have rent and
property value appreciation in the future, but you're not getting those benefits right away and the cash flow will be negative to start.
When the fund is liquidated the priority of payment is as follows; return of your original investment, then reinvested dividends, then your share
of property value appreciation.
1 — Return of your original investment 2 — Then Reinvested dividends 3 — Then Your share of property value appreciation
The total profit earned on the property from cash flow, mortgage principle repayment and
the property value appreciation all result from your initial $ 25,000 investment that helped you secure a mortgage on the property.
Not to mention you'll hopefully enjoy the other benefits of owning property like writing off interest on your mortgage and
property value appreciation.
Add in a bit of
property value appreciation and you might have a double - digit return (at least on paper) in this notional example.
Property value appreciation - In many areas, property values have risen.
Tightening market conditions should set the stage for
some property value appreciation in the near future, says RBC.
Both metrics have underwhelmed in recent months, however — with corporate bond yields hitting a three - year high last month as
property value appreciation has slowed and reports in September that REITs were trading at nearly a 15 percent discount to what investors would pay for buildings individually.