Despite falling rents and rising vacancies, the profitability of residential rental property is improving. Investments in apartment complexes are generating annual returns of 7-8 percent immediately because purchase prices have declined.
Buying a rental property isn’t for everyone. It requires putting down at least 50 percent in cash because banks are reluctant to lend more. And buyers need to be able to hold the property for at least three to five years or more to give the investment time to gain value.
Source: The Wall Street Journal, M.P. McQueen (02/20/2010)
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