In Spite of everything that is being published in the local Gazette newspaper and other publications like USA Today and the Wall Street Journal, real estate is good investment. Real estate is a particularly good investment for investors. What better time to buy rental property that when home prices are down.

Now before you go out and buy a rental property, you need to hook up with an experienced REALTOR® like Brian Maecker. Brian has been investing in homes for over 20 years and has developed a great money making strategy.

The strategy briefly is: #1 to buy it right. Look at the market and try to buy the lowest home in any given area. #2 Calculate rents in that area. You can use rentals.com or the local paper. Figure your rental return on the low side. #3 Calculate the positive cash flow, That is the difference between payment and rent. I like to see at least $100 plus dollars a month. The cash flow divided by your investment is cash on cash return. I like to see 7% or higher. #4 Calculate appreciation. I use 3% as a base. In today’s market it might only be 1% or nothing for 2008. But in 2009 and beyond, there will be positive appreciation.

When appreciation is added to cash flow that is your total before tax return.
My next blog we will talk about the after tax benefits. If you are interested please contact us at www.maecker.com.

Thanks,
Brian