Billings, MT

Investing in Residential Rental

Should I are shouldn't I invest in rental property at this time? Great question as always yet very relevant in today's market when trying to choose where a reasonable place to invest your money. The choices are always the same cd's, stock market, precious metals or real estate.

So how does real estate stack up? Since 1968 in Yellowstone county residential real estate has appreciated at 6% rate going from $17,933 to $196,847 today. The DOW has appreciated at 5.85% going from 855 to 8083 today. Gold has appreciated at 7.9% going from $39.31 to $833 today. Each invest has it own pro and cons the question is which is the best primary investment for your security.

Gold, while a store of value, has several issues, no income produced, how do you store it securely with controlled access by you, how do you trade it for something you want, how do you prove to buyer it's what you say it is?

Cd's and Bonds easily purchased and sold, Cd's and Bonds can produce income, can either be taxable or non-taxable easy to store with a reputable brokerage or a safety deposit box, the con's inflation can destroy value, bond issuers financial condition can go bad.

Stocks easily purchased and sold, stocks can produce dividends for income, easy to store with a reputable brokerage, the con's how do I select purchasers, how do I manage my sales, when do I trade? Markets go both up and down; companies invested in can have a financial turn for the worst.

Real estate can easily be purchased and sold, can leverage investment with debt, can produce income stream, can tax shelter income stream, can sell trade up and defer tax consequences, can have a tenant pay off the debt you used to purchase. Con's it takes hands on management or hiring a property manager, markets go both up and down.

The above numbers and the chart below give you some food for thought. If you have any question please contact me.

the question of timing of a purchase of home, in economically turbulent times. would perplex most rational thinking person. the short answer i would give it depends. the largest factor i would suggest the a buyer whether a first time or an move buyer ask them "is how long do i plan to stay in the home i purchase?" i believe this is the critical component of comparing the "rent vs buy" dilemma. the short answer in most markets in the past would be a minimum ownership of 24 months. the prudent answer with today's environment would suggest a longer view of ownership ranging more in the 36 to 60 month range to receive the befits of ownership versus the cost of buying and selling when compared to the lost opportunity of ownership and renting. below is a graph showing the monthly principal and interest payment of the average sales priced home as compared to the average asking price for a home for rent in Yellowstone county. i hope this would give the reader more insight into recent develops that would tip the balance to purchasing within the parameters i outlined above.

I've had a few Montana Dreamin' folks call me lately looking for a price slashed vacant lot, and I'm sorry, we just haven't seen that yet! In fact, we may escape this syndrome!

We have a lot of Lots (that's a mouthful isn't it?) for sale, but the developer/capital holder is in this game for the long haul, and they should be! We continue to be a growth area, not rapid growth but more of a steady 2% hill climb. You can review statistics and predictions from a number of economists, and they basically say the same thing, we are steady as she goes!

Small acreage properties within 30 minute commutes to Billings are decreasing in numbers for anything over 3 acres, but there are many 1 acre properties to choose from. Anything between Billings and Laurel may already be out of reach for the average home buyer.

So if you're dreamin of owning a speck of land in Big Sky Country, you better get it now, it ain't gettin any cheaper!

No 50 cents on the dollar here! Sorry!

Historical price trends

Historical price trends