You are deciding to purchase an investment property in an ideal location you prefer. You would address the following issues before buying the property :
1) Decide the location and the specific real estate property you would like to buy . Please provide justification why the property is chosen, e.g., affordability, the potential of price appreciation. Use some data to justify your selection, e.g., the housing price growth rate in the region. You could use the resource like
zillow.com, etc.
2) Find out the mortgage rates for different properties and choose between 30 or 15-year fixed-rate mortgage. You could use bankrate.com, etc. You must justify your decision.
3) Calculate the monthly mortgage payment given the down payment you will make. This will be a fixed 80% payment mortgage loan with 20% down payment. It means you will pay 20% down payment at the purchase and finance 80% with the mortgage. Please show your calculations of monthly mortgage payments in the report.
4) In the meantime, predict the amount of monthly rental you will be able to collect when
you lease the property out . The rental period is the same as your mortgage period. In other words, you will pay off your mortgage and end the rental in the same year. Justify your rental income projection.
5) Project the resale value of the property at the end of the mortgage payment period. You need to use some statistics to back up your numbers.
6) Once you have
a. the projected monthly mortgage payment
b. the monthly rental income
c. the resale value of the property at the end of the mortgage payment period
