Can Rental Properties Finally Cash Flow in California?


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Can Rental Properties Cash Flow in Redding, California?

With real estate at an all time low there are many rental properties in California that are actually cash flowing.  Surprisingly, since just a few years ago it was almost unheard of.

A real estate investor would be fortunate to get enough rental income to cover all the expenses, which included principle, interest, taxes, insurance, maintenance, repairs and in some areas, Homeowners Association fees or Mello Roos.

If an investor paid cash for the rental property, there’s still the return on investment that needs to be considered and when the breakeven point would occur.  And if the rental property was purchased during the peak of the real estate market, the investor not only lost the money down to purchase the property but its value, double whammy!

Devastating but true, I’ve been there.  Alright, enough about the losses, I almost forgot what my topic was about as I could go on and on.

So the good news, listen up real estate investors, NOW is the time to purchase real estate.  You may be thinking that the real estate market has not quite hit bottom, but real estate sales are up this quarter.  If you purchased your rental property now, you would still be able to cash flow your property.

There are several properties available for sale in the Redding area, from single family residences, apartment complexes and commercial properties that can be purchased with a positive cash flow income.  Many savvy real estate investors are taking advantage of this declined real estate market and include foreclosures and short sales as part of their  buying option.

The bottom line is getting the right purchase price and running the numbers in order to cash flow the property.  With interest rates at an all time low (they’re slowly creeping up) and rental rates up due to the foreclosure rates, there’s no reason, with the right property, you couldn’t cash flow.  Although banks are tight in lending, there are several other ways to purchase rental property.  Depending on a seller’s situation, there may be seller financing available, “subject to”, and short term hard money lending.

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