For Investors

For Investors

With both interest rates and home prices now at historic lows, many people are now considering investing in property. With as little as 20% down, it is possible to see a good monthly return on the right investment home purchase. At The McKinley Group, many of our team are property investors ourselves.  As CIAS & CARI Certified realtors, we can offer knowledge of the local market, investment strategies, as well as expertise in the rental business to ensure you maximize your investment. Our Buyer Agents will work with you to establish objectives, secure the right property and achieve the best possible price, while our Property Management Department offers full service management, from finding a tenant to handling maintenance issues.

Sample investment return analysis:*

Initial outlay:
Property price - $110,000
Down-payment @ 20% - $22,000
Initial fix-up/ clean - $5,000

Monthly costs:
Mortgage payments (principle on loan of $88,000, interest @ 6%, taxes @ $1200 per year and insurance @ $50 per month) - $678
HOA fees - $40
Monthly maintenance amortized - $30
Lost rents amortized - $75

Total – $823

Rental income - $1,150

Net monthly income - $327**

**Cap Rate of 9.6%  and a Cash on Cash Return of 15%

Some Questions to consider:

  • Are you looking to maximize yield (monthly return) or long-term equity growth, or balance both? This will affect the location and type of property you purchase.
  • Certain repairs are required.  Are you prepared to complete some repairs to the home? The Arizona Landlord Tenant Act and Tenants expect certain standards.
  • Have you thought through all the monthly costs associated with owning rental property when calculating your return? Out-goings may include mortgage payments, taxes and insurance, HOA dues, maintenance, lost rents, and marketing costs.
  • What type of tenant are you seeking to attract? This will impact not only the type of property you should buy, but also the included features and contractual terms offered.
  • Will you include all appliances or only some? Most tenants expect a range, dishwasher and refrigerator, but items such as washer, dryer, or microwave may help your property rent more quickly and for a higher monthly amount.
  • What is the best way to prepare your property to avoid future maintenance issues? Consider a low-maintenance drip system for your yard, pool service contract if appropriate, leaving inexpensive air conditioning filters for your tenant and ensuring all appliances are regularly serviced. Incentivize your tenant through contractual terms to leave your property in move-in condition.
  • What do you expect from your tenant? Make your expectations clear from the outset regarding timeliness of rent payments, property maintenance and deposit refund, as well as issues such as pets.
  • Do you know how to structure a tenancy agreement to protect your asset, stay within the law and be fair to all parties? Professional assistance is the best way to handle this.  We have the experience, the rental pool, the ability to check credit and references and be the third neutral party representing your interests.
  • What is your exit strategy for your rental property/ies? Have you consulted with your tax accountant to consider all options? Is a 1031 Tax Exchange an option for your long term investment portfolio?

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Contact Information

Photo of Gina McKinley Real Estate
Gina McKinley
RE/MAX Masters
2390 W. Ray Road, Suite 4
Chandler AZ 85224
Cell: 1-480-779-9420
Fax: 480-355-8912

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