Return on investment
So you have money in your bank, it’s safe and you are gaining money on interest.
But how much money are you really getting for it?
Let’s compare a savings account:
Currently most interest rates for a saving account in the U.S are about 1% APR. A Money Market account is about 1% and CD is about 1.05%.
Let’s compare $100,000 dollars in the bank (at 2%) against $100,000 dollar property (Square Ft: 1,600, Bedrooms:3, Bathrooms:2)
| Compare for a year | Property | The Bank |
If we rent the property at $1,400 a month vs. 2% interest in the bank |
$16,800 |
$2,000 |
Let’s take out oversize amount for property taxes, HOA and on other expenses |
-$5,000 |
$0 |
Total |
$11,800 |
$2,000 |
