Thoughts On This Deal
I have a chance to buy a duplex in the far SE of Arkon. Cost to buy is 110k (based on owners tax value of house as cited by city of Akron). Taxes are about 1k (half). Rent income is 975 (475 and 500 per unit). Rent is below market, but renters are long term (10 years for one, 4 years for other). House built in 1961, not abused but is a bit neglected (needs paint, carpet etc). New AC/furnace/Water heater in one side. Other side is about 10 years older. Roof 10 years old. Decent neighbor hood, lots of new houses down the street (listing in 140-200k range). Crime is lower than the Akron average. Owner is willing to carry a 20% second mortgage, not being sold through realtor. I live about 10 miles from the place, so I would manage it. Thoughts?
Is this going to be a long term buy and hold? Are all the utilities seperate? How common are duplexes in your area?
[ Edited by d_random on Date 03/01/2007 ]
Probably buy and hold the units. Tenants pay sepearte utilities (gas heat, electric etc). Tenants deal with lawn. Duplexes are fairly common in the general area. In the neighborhoods nearest this house, there are few/no duplex. The asking price is based upon City of Akron tax value, which is still based upon 2003 value. Owner is/was ready to raise rents $25 a month[ Edited by clevincc on Date 03/01/2007 ]
$975 rent for a $110,000 property is a terrible return for our area. Unless you could turn around and sell it for more, I would walk on this one.
Chris
I have leads on 3 places..the above is the best one I have had so far. The other duplex 170K, rent 1100 total a month. Other duplex is 130k, rent is 700 total a month. No way that the numbers work on those. Taxes are steep around here plus mortgage, I would be negative 200-300 or so a month on those.
Think there is anyway the rents could be bumped up to $550 per unit? Got any idea of what the comps in the neighborhood are? Maybe add a Dishwasher, Washer & Dryer (if the tenant pays for water). Based on what you have said about the other properties you have looked at, perhaps this is a good deal in your area.
Rent could go to 525 with no issue, 550 next year. Comps in neighborhood (single family) range from 140-200k
What are you missing? How about your farm area, the city or physical area you work?
[addsig]
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Damion Webb