It costs 160k with two units, each 900/month rent. I may live in one side. I can easily put 10% down with money for repairs. It appears to be ok structurally but could use a lot of little things. It is currently unoccupied but was half occupied until a couple days ago. Should I buy it? Will it be to much work?
2007-01-03 05:37:06 · 4 answers · asked by San Chez 2 in Business & Finance ➔ Renting & Real Estate
Well owning a rental property is always a good idea, yet it is work and responsibility. Now, should you buy it? First of all apply all other tests that you normally would when buying a house or apartment or any real estate for that matter.
1. Is this a good area?
2. How are schools?
3. How is this price compared to other recent transactions for comparable properties?
Consider pure economics: If you buy it for 160,000 and put 10% down, and say get a mortgage at 6.5% your mortgage payment will be $910/per month + a PMI (Private Mortgage Insurance) about $70 per month, plus a real estate tax approx. another $100.
So your total monthly expense for this property will be about $1100 per month. Well if you find a tenant for 900 per month, that will be simply great, you will have yourself a place for $200 a month and hopefully it appreciates as time goes by.
There is always a bit of hassle finding a tenant, making sure they're creditworthy etc. But, you are trying to do something, and any enterprise involves some risks and hassles. One question, what if you can't find a tenant for say 6 month, are you going to be OK financially? If the answer is yes, then go for it. If the answer is no, then either forget about it or you need an emergency fund to cover for such an occasion.
Back to this property, I understand this is an older building, get yourself a good inspector and have him check the building out. Don't do inspection yourself. A professional inspection of a building like this one should run 300-500 dollars and you do it after you are done negotiating the price. Pay inspector, this maybe the best 500 spent on the whole transaction. A word of caution on inspectors, sometimes they get carried away and just enjoy trashing buildings. They seem to enjoy finding every little defect they can. Just go over report with them and ask how serious each problem is, does it need to be corrected, if yes how soon.
Sorry for running on, but I am a professional realtor and just wanted to help as much as possible.
Good luck.
2007-01-03 06:03:37 · answer #1 · answered by Alexander K 3 · 0⤊ 0⤋
Sounds like a good deal if you can keepit rented. You need to determine how much the properties in the area are appreciating annually as well as have it inspected by a licensed home inspector.
2007-01-03 06:02:19 · answer #2 · answered by Alexandra 4 · 0⤊ 0⤋
Have it inspected by a professional home inspector. Only buy it if you can afford to pay all the bills with no rent coming in. It will happen. Be ready.
2007-01-03 12:29:17 · answer #3 · answered by sm4125 3 · 0⤊ 0⤋
Write a term on your purchase settlement which you will take the valuables over after the tenants have long previous. permit the owner eliminate them. If there is any difficulty or harm why could you want to take that on except you have very lots?
2016-11-26 00:50:57 · answer #4 · answered by Anonymous · 0⤊ 0⤋