10% returns on Dakota County investment properties are readily available to people that are looking for a proactive way to invest extra cash outside of the volatile stock markets. While the real estate market has certainly been volatile, collecting regular rent checks no matter what happens to the underlying value of the property makes for a much more stabile investment vehicle.
Apple Valley Townhouse
Right now the following townhouse can be had that should return 10% without even considering depreciation write offs or the possibility of appreciation. The property in question might be hard to finance right now but if it could be financed the leveraged investment would return closer to 18%.
Here’s what the investment spreadsheet I use looks like for this property in a prime location that’s less than 12 years old -
This property should easily rent for $1,000/month if not more but even if it only rents for $950/month it would bring in over 9%. While I’m factoring in the investor self managing them it could also be managed by a property manager. I also build in conservative estimates for 5% vacancy, a $200/year legal budget and a full month’s rent for repairs.
10% Returns on Investment Property
The point is that many investors feel we have maybe 1-2 more years of opportunity to capitalize on bank owned and short sales property prices to scoop up real estate at about half of what it sold for 5 years ago and realize these 10%+ returns on Dakota County investment properties.
In addition, vacancy rates are declining and rental rates are increasing in response to more people moving out of homes and in need of rental housing.
If you are looking to diversify into real estate it’s a good idea to find a Realtor with experience in buying investment properties as well as the processes to find and manage tenants. With 5 rental properties of my own in Dakota County I’m in a unique position to help investors. To get started contact me.
If you’re looking for more real estate investment property advice I highly recommend the articles and message boards at www.biggerpockets.com
Bill Wallace is a Realtor at RE/MAX Results in Apple Valley, MN with a focus on Dakota County and the Southern Twin Cities including – Apple Valley, Bloomington, Burnsville, Eagan, Farmington, Inver Grove Heights, Lakeville, Mendota Heights, Prior Lake, Richfield, Rosemount, Savage, Shakopee, South St. Paul and West St. Paul. He is licensed to practice real estate in both Minnesota and Wisconsin.