Didn’t want to diversify your investment portfolio into property rentals? Think again!

This side by side duplex (3 bedrooms per unit) was recently purchased by one of our clients in the city of Lorain for $13,000.00. His costs to get this home ready will likely total about $6000.00 for a total price to acquire and make ready for rent of $19,000. He will get about $900 in monthly rent from the units, If your factor in all of the costs including management, vacancy and maintenance you he will likely net around 600 a month. That is a potential 37% annual return with the initial investment potentially being returned in 2.63 years.

Risk allocation and diversification are terms bandied about quite a lot in the world of investments and retirement accounts. There are so many investments out there to choose from. Most successful professionals don’t see investing in local property rentals as viable, because of all the time, energy and potential drama involved. Also they don’t realize that it is often possible to invest in real estate rentals through their retirement account.

Realty Trust Services, property management division’s key focus is to “Make your property investment a passive investment(TM)”. Just as you get a monthly statement showing you how your 401k is doing, you will receive a statement showing you how your rental home is doing. You don’t deal with crazy tenant drama, leaky toilets or late night calls.

North Eastern Ohio property prices are some of the lowest they have ever been if you adjust for inflation. Also the ratio of property price to yearly rent income for properties on the market is as low as five to one in many areas. That means that some properties could pay back the original investment in as little as 5 years, and that is only the beginning. The market is cyclical and currently property values are at a historic low. While the incomes on these properties can justify the purchase regardless of if values will go up or down, many experts are calling high inflation inevitable, and in times of inflation real estate prices typically do well as investors will often take their money out of the financial markets and look for hard assets like real estate and precious metals to invest in.

Because Realty Trust Services manages more than 260 residential units, they are in a prime position to assist folks who are looking to diversify into real estate. Their agents are able identify properties that have the potential for excellent positive cash flow and there maintenance department can recondition the properties to achieve ideal rents. If your current retirement plan does not allow for the investment in real estate, they can introduce you to self directed IRA and 401k custodians that will allow you to roll your accounts over to a format that allows for a greater diversification, greater stability and potentially higher returns.
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About the author: Andrew Morris is a real estate broker with Realty Trust Services. Neither Andrew Morris nor any sales person, contractor or employee of Realty Trust Services is a licensed financial advisor. If you are interested in purchasing real estate for investment or in converting your current property portfolio into a passive investment, then call Andy Morris at (440) 220-7300 or email him at andy@PropertyManagementOH.com.

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