Can I rent your gold??

By Jerry Robertson July 10, 2012 Investments

What is the monthly rent for your gold? I am interested in renting because I can’t afford to buy my own right now and renting seems like it would be a good idea. After all I would get all the benefits of the use of the gold but none of the hassle of owning it. Storage, insurance, taxes, etc. would remain your responsibility but I would pay you about 1% of it’s value in rent.

Ok, I’m kidding but I have a point. You can’t rent gold. There is no market for it. There is a market however for rental houses. I was watching some news program the other day and a commercial (interruption marketing) came on asking an interesting question.

If you were offered $100,000 worth of cash, real estate or gold which would you take? They were selling gold of course but it got me to thinking. They are selling ‘appreciation’ instead of cash flow. Real estate is not offering appreciation right now (it will again, but not right now) but it can provide some significant cash flow.

I am working with investors right now that are looking to buy rental houses in the $50,000 price range. Their goal is cash flow. Take this simple example:

$50,000 – Purchase price
$1,200 – annual tax
$600 – insurance costs
$1,080 – Management costs (no midnight calls to you 🙂
$150 – home warranty (covers for big repairs)
$53030 – total investment for 1st year

$10.800 – rent ($900 per month)

20% return on investment (CAP Rate)
$7,770 positive cash flow (before tax write offs)

These are real numbers and real rents. Right now it is possible to buy a rentable house in Gwinnett County for $50,000 and while it might need some clean up and repair you will absolutely see more ‘income’ from a house like this than you will see from a gold purchase. You can even do this sort of thing inside your IRA if you want. It’s called a Self Directed IRA and I can get you more info on that.

If you want to sit down and discuss your individual situation (every investor and investment is different) I would love a chance to talk to you. Call me and we’ll set a time to meet.

Thanks for listening,

Jerry Robertson | Associate Broker
Keller Williams Realty | Atlanta Partners
678-231-1578 Cell | 678-935-1342 FAX

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