Cash Flow & Appreciation in Single Family Residential

?Why Sacramento Single Family houses have become a great investment

It?s a clich?, even in real estate circles, but as I watch the rain fall on this March morning in Sacramento, ?I am led to the oft-repeated metaphor of the ?perfect storm? for investing in Single Family homes. ?Still the facts are the facts. ?Investors seeking stable cash-flow, equity growth, tax benefits and relative liquidity would be wise to consider single family homes as an investment in many towns throughout our fair country. ?Indeed, even Warren Buffett recently declared he would like to own ?a couple hundred thousand single family homes?. ?

On a national level, consider the following:

Here is how these items relate specifically to Sacramento:

• The median house price is as of 2/2012 is $163,000
• The median rent for a 3 bedroom, 2 bath home ranges from $1,000 to $1,700/mo.
• Non-owner occupied mortgage rates for 1-4 unit homes are around 5% APR
• The population continues to rise at a forecasted rate of 1.5% per year through 2016

When thinking about appreciation, consider:

And yet it is still possible to ?buy wrong?. ??For instance, in many of the newer suburbs, there are estimates of a 20-year (!) oversupply of homes. ?These properties generally garner less rent per foot and may actually decline in value for a years to come.

It is important to work with or partner with someone who understands not just the local rental and resale market, but has a true understanding of the economics, politics, demographics and technology factors that contribute to current rental demand and future value growth.

Source: http://sacramentoincomeproperty.com/2012/03/14/cash-flow-appreciation-in-single-family-residential/

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