Federal Reserve has increased the interest rate several times over the last 12-18 months and continues to do so. Does it still make sense to invest in Real Estate? Due to low interest environment, U.S. housing prices have experienced exponential growth in last few years and just started to declinesee the price move inside the circle of the S&P/Case-Shiller U.S. National Home Price Index trend. Your group is deciding to purchase an investment property in an ideal location you prefer. The price range is between $250k and $500k. You would address the following issues before buying the property:

4) Once you have the projected monthly mortgage payment, monthly rent income and the resale value of the property at the end of mortgage payment period and your down payment, you could discount them to the present value in Excel or using a financial calculator. The discount rate is the mortgage rate. The return on your investment property is calculated as (the sum of present value of inflow cash flow) / (the sum of present value of outflow cash flow) -1.