Where to put your savings.Q A My husband and I own a two-unit rental property. We get $600 per month for it. We currently place the money into a savings account Savings Account A deposit account intended for funds that are expected to stay in for the short term. A savings account offers lower returns than the market rates. Notes: and use it to pay property taxes and insurance, which total $3,600 a year. We plan to use the leftover money for future real estate purchases and property repairs. Is a savings account the best place to keep our money? A. Richardson New Orleans New Orleans (ôr`lēənz –lənz, ôrlēnz`), city (2006 pop. 187,525), coextensive with Orleans parish, SE La., between the Mississippi River and Lake Pontchartrain, 107 mi (172 km) by water from the river mouth; founded Saving $600 per month from your rental property and paying $3,600 a year in taxes and insurance leaves you with $3,600. Unfortunately, in my opinion, that sum is not quite enough to adequately take care of repairs and more real estate purchases. And keeping the amount you'd save in an account earning 2% or less won't really be helpful since real estate prices are appreciating far faster than the interest you'll earn. I would suggest using your savings to enhance the appraised value An appraised value (USA) or mortgage valuation (Australia) pertains to the assessed value of real property in the opinion of a qualified appraiser or valuer. It is usually used as a pre-qualification & risk-based pricing factor related to the issuance of mortgage loans by a of your current rental property. Refinish re·fin·ish tr.v. re·fin·ished, re·fin·ish·ing, re·fin·ish·es To put a new finish on (furniture). re·fin hardwood floors, add stylish lights or brass fixtures, renovate a kitchen or bathroom. If you make repairs that add value, you'll create equity you can use for purchasing property in the future. After a year, look to establish a home equity line of credit from which you can draw when you are financially ready to take on another mortgage and increase your real estate holdings: Hake hake: see cod. hake Any of several large marine fishes (genus Merluccius) usually considered part of the cod family. Hakes are elongated, large-headed fishes with large, sharp teeth, two dorsal fins (one notched), and a notched anal fin. sure you factor in escalating energy costs and insurance before you increase your investment property holdings. --Matthew S. Scott |
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