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Market value numbers below are estimates only and are based on our research. Please do your own due diligence before purchasing any of these properties and ensure that you work with a reputable Realtor. It is possible today's property may no longer be available as well-priced bank owned real estate (REO) is often snatched up quickly by investors.

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Lyman Population:  3,500    |   Cost of Living: 9% Below U.S. Average    |   Crime Rate:  Meets U.S. Average

 

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Today's Bargain: Single Family Home (Bank Owned)

164 Westview Dr., Lyman, SC 29365

3 bedrooms, 2 baths, 1,274 sq. ft., built in 2001

Current Price: $135,000    Web Site

Current Market Value Estimate: $148,990

Taxes: $769 (2018) | HOA: No

Last Sold: N/A

Attractive home with large windows, high ceilings, master suite with bath, new carpet, new flooring, new appliances, new cabinets, new fixtures

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South Carolina Stats:

Population - 4,961,018

Persons 65 years old and over - 16%

High school graduates, percent of persons age 25+ - 85%

Bachelor's degree or higher, pct of persons age 25+ - 25%

Persons of Hispanic or Latino origin - 5%

White persons, not Hispanic - 64%

Median household income - $45,483

Social Security taxed? No

Source: U.S. Census Bureau

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Can Rental Properties Fund Your Retirement?

Some claim retirement can happen at 40 if you find the right property at the right price at the right time on the right terms. Becoming a landlord can enhance your portfolio, provide a hedge against inflation, save you from the volatile stock market, and give your income stream a much needed bump. But it isn't easy money. It's not for everyone.

Consider financing and debt first. You may need more than 30% up front for a down payment and closing costs. Terms are favorable for owner occupied properties. Could you live in your property for a year before renting it? What about a portfolio lender? They keep the loan instead of selling it to a secondary markets and don't need to meet Fannie Mae's or Freddie Mac's stringent requirements. Foreclosures and tax sales may be an option. Buying one of these may help you skip the mortgage, but it may also leave you paying for a wealth of fixes. An experienced realtor can help you navigate mortgages and foreclosures.

Even after you've bought the property and brought it up to standards, you'll need cash in reserve. The water heater might go out. A hail storm may ruin the roof. What about a fire? Even a small one? Repairs like these can't wait until you find enough money. Your reserve account should amount to about six months of normal rental expenses.

You'll need to know tax implications. Some are valuable. You can claim depreciation and mortgage interest. That will minimize your tax burden year by year. If your adjusted gross income is $100,000 or less, you may also claim a rental real estate loss allowance of up to $25,000 per year. A good tax professional can help you navigate the ins and outs.

None of this matters if you don't pick the right property or properties. You'll need a solid return on investment. If the house is not in a good neighborhood, if basic needs are far away, the schools are bad, and rents are low, buying that house for your rental portfolio is a bad idea. You'll want at least a 1% return. That means if you bought and fixed a home for $200,000, you'll need to charge a $2,000 a month rent. If this is your retirement income, the math gets complicated. You might want an array of properties that return as much as 10% on your investment.

There are other questions you need to ask yourself. Can you wait for a property to generate a stable income? Your rental assets will not be liquid. Are you ready for that risk? Do you have other eggs in your basket (Social Security, an employer pension, stocks and bonds)? What about the renter who doesn't pay or who trashes the place? Will you manage your properties by yourself or will you need a good property manager?

Still ready to become a landlord? Educate yourself, save your money, find the right people who will help you make the right decision at the right time. If you can do all that, then rental properties can be a good way to generate retirement income.

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