Have A House, Best Way To Make A Profit?
I want to buy a house for $160,000, and rent it out for 4 years and then sell it to make a profit. This house is in a relatively hot market in which real estate is expected to apreciate. Since I am renting it, should I go with a 15, 20, or 30 year mortgage? Say, after 4 years, the house is worth 185,000, how much can I reasonably expect to make beyond the 25,000 in appreciation? Is their a better way to go about this than I have mentioned here? Thanks! :-o
If you're positive you'll only be holding the property for four years, the logical loan product would be a 5 year ARM.
As for your other question, I'm not sure what you're asking.
Are you wondering how much rental income you could potentially generate?
Be more specific.
Also, the $25K appreciation you're forecasting is entirely speculative.
Where are you getting that number?
[addsig]
What I am asking as far as additional income is how much of the rent would be equity. Say I collected 1000 a month rent for 4 yrs, that would be $48,000 dollars, but the balance of the loan might have only gone down 8 or 9 thousand dollars. So when I went to sell the house after 4 yrs, would I make a profit of close to 40K or more like 8K.(this is just from rent equity, not appreciation). In other words, is all the interest paid on the mortgage lost, or does it transfer to the next buyer so you can collect this portion too.
As far as the assumed appreciation, I have been told to expect 8-10% appreciation on houses in central florida, does that sound unreasonable? Thanks.[ Edited by gorilla1 on Date 07/13/2004 ]