There are three industries that have been constant wealth builders for hundreds of years. Shipping/transportation, banking/insurance, and property/land ownership.
As the housing market in Southern Colorado has seen significant upward movement in the last several years so has the rental market. Cost of homes and rental prices typically follow one another which makes sense as they are both housing, and I am a big fan of rentals for supplemental income, long term investment, and tax purposes. From a simple ROI (return on investment) of your money it is very realistic to see 5%-8% ROI which is a greater return than a bank account, CDs, and most other financial instruments offer. Consider the amount of money down you would use to purchase a home, or the equity you have in your current home if using that property, divided into your annual rental income return after expenses (mortgage, taxes and insurance, etc) to figure ROI. In my experience from owning 8 rental homes over the past 15 years in three states, Colorado Springs has been the best market. There are a large number of transient professionals that prefer to rent vice own and are willing to pay a higher rent. In my experience the hassle that some people worry about with owning a rental is minimized by the prior fact, along with doing your own property management which is my biggest recommendation! Keep an eye on your investment and keep your money. The current tax law continues to allows rentals, which are a business, to have deductions. With a little courage to venture into rentals you will see a much better return on your money than traditional options as a tenant is paying down your mortgage principle.
Eli Harman - Broker Associate