Generating Significant Profit from St. Paul Houses
Due to the combined effect of the housing crisis and the government programs to stimulate home buying activity, the amount of profit to be earned from purchasing and rehabilitating Saint Paul houses is higher than ever.
There are currently over twenty properties with four or more bedrooms within the city limits costing between $50,000 and $100,000 many of which are either bank owned or short sale properties. It is reasonable to assume that an $80,000 property will need around $30,000 in work to turn it into a desirable home which will sell quickly. The home, once fixed, will sell for at least $150,000, generating net proceeds of around $139,000. How many investments in today’s market can offer a 21% return un-leveraged? Of course, if one can finance 75% of the cost of the original house, then the return would be 63%.
Although investing in single family residences can be a risky proposition, buying a Saint Paul house is different from purchasing in the suburbs. First of all, the city’s economy is anchored by government, education and health care. These industries are unlikely to go anywhere. Furthermore, the city is located in the center of the metro area, enjoying reasonable commuting distances from major work areas, which differentiates it from some of the third ring suburbs which are likely to be the last to see housing prices recover. Third of all, with the Central Corridor about to break ground, although opinions are mixed on how much benefit it will bring, there is no question that Saint Paul will not lose out from the new transit line. Finally, even if the house does not sell, current rents in Saint Paul will more than cover the mortgage and property taxes while one waits for the market to pick up.
Because of all of this, investing in residential property in the Capital City is a no-lose situation. Your Realtor can assist you in finding the right property today.
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