Ep 11 Advanced: Norm and Norma Buy Owner-Occupant Property and 10 Rentals
Advanced Real Estate Financial Planner™ Podcast
Welcome to the Advanced Real Estate Financial Planner™ Podcast. I am your host, James Orr. This is the advanced analysis of Episode 11.
In Episodes 8, 9 and 10, Norm and Norma rented themselves and bought rental properties with 15% down, 20% down and 25% down payments.
In Episode 11, Norm and Norma see what the impact was of buying an owner-occupant property to live in and then buying rental properties.
So, instead of renting a property where they personally live, they decide to become owners and then landlords.
In this advanced version of Episode 11, we will look at the impact of variable assumptions for property price appreciation, rent appreciation, stock market rate of return, inflation rate and mortgage interest rates.
In other words:
What happens if property values don’t always go up 3% per year every year?
What happens if rents don’t always go up 3% per year every year?
What happens if mortgage interest rates don’t always stay the same as they acquire properties? What if they sometimes are higher or sometimes are lower?
What happens if the stock market does always go up 8% each year, every year? What happens if they sometimes have the stock market go down?
What happens if inflation gets out of control and personal expenses balloon for a spell? Or, what happens if they see abnormally low inflation for awhile?
We’re using the same range of random values we’ve been using in the previous episodes for Norm and Norma so I won’t repeat them here.
And, since we’ll be covering all three down payment situations, in many cases I will compare buying rentals with the same down payments (15%, 20% or 25% down) to whether they do it as a renter themselves or they buy an owner-occupant property first themselves.
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