Investing in Single Family Homes

1. Demand for Rental Homes Increasing Substantially

• a. Many existing homeowners cannot afford current payments
• b. Lenders now requiring downpayments and better credit

• 2. Other Investments????

• a. Interest earning – CDs, savings, bonds, etc.
•       i. Interest rates at historical lows
•      ii. Property values typically increase as rates go down – borrowers can afford more house for the same payment
• b.  Stock market
•       i. Stocks are trading at historical highs based on earnings vs. price
•      ii. Private equity funds pushed stock prices to unrealistic highs
• c.  Condominiums
•       i. Poor appreciation and condo dues increase
•      ii. Compete with apartments
•     iii. Units are not "unique"

• 3. Benefits of Rental Home Investment

• a.  Instant equity - Purchase home at a discount
• b.  Minimal investment - borrow 80% or more of the purchase price
• c.  Appreciation
•       i. Columbus median house price increased 22.7% during the 2000 to 2005 ( Money 06/01/05 )<
•      ii. Columbus is the nation's THIRD most stable housing market ( Forbes October 2007 )
• d.  Tax benefits
•       i. Depreciation – a $160,000 home will generate over $5,000 of depreciation per year
•      ii. Tax free exchange on sale – Purchase another property within 180 days of sale and avoid capital gains tax