Two Extreme Types Of Rental Properties.
I am currently looking at two deals. They are minor rehabs as rentals.
Deal 1:
Listed at $102k
Could get for $90ish hopefully
With $7k in repairs I could get $110-$120k
It is in a good neighborhood near a VERY large development of $200-$400k homes. I was thinking of getting in touch with realtors that I know that work with the new construction and have a month-to-month rent contract for people waiting for their home to be finished. If I could rent it for $1100/month I would do alright I figured. Does anyone have any experience with that?
Deal 2:
Home listed for $79,000
Been on market 1 1/2 years. Originally listed at $120k
Outside COMPLETELY rehabbed, the home looks like a $250k house from the outside. Inside is trashed/stripped. It's like they ran out of money. The area is an old lower class neighborhood of $70k homes.
I could hopefully get in for $70k. With $8k of interior cosmetic fixes I could hopefully refinance for $85k to pay back repairs and get a little extra cash. About five blocks from this house is a $35k/yr college campus. I was thinking of renting this home to 2-3-4 students for $1000-$1100 a month. It is 1600 sq ft and would have an 1100 sq ft finished walkout basement when I was done. It also has a 2 car garage on a shared driveway. I think I could get that much rent from multiple students. Does anyone have any suggestions working with college campuses? Good bad or otherwise?
These would be my first rentals. I am getting a family member to help with the financing/fix up costs.
Thanks a lot
Chase
Chase, Deal #1 may be a better property to rehab and flip. Be careful with Deal#2 many cities have ordinances against unrelated people living in the same house in a single family neighborhood. Hope this helps.
Be careful about students .they are famous for damaging apts . make it a lease and have parents co-sign if possible. just sign me -BEEN THERE
Quote:
On 2004-02-04 04:33, TNTRASH wrote:
Be careful about students .they are famous for damaging apts . make it a lease and have parents co-sign if possible. just sign me -BEEN THERE
I would go for the first house. A few years ago we rented a townhouse we own in a not-so-lovely neighborhood, and took in 3 brothers, late teens/early 20's. They worked construction and promised us the moon, about doing fixes to the property, etc. etc. We recarpeted the entire house as the previous tenant had been there over 5 years and carpet was pretty shabby. Fast forward 10 months and several headaches and threats of eviction later, they skipped. OMG you wouldnt believe the sight we walked into. Back door had been kicked in and never fixed (it would close but couldnt be locked), new carpet absolutely TRASHED, roaches EVERYWHERE, I stopped counting after about 30-some empty Crown Royal bottles, I could go on and on. This place had no doubt been a party palace. Lesson learned, we would have been better off waiting and losing a month's rent than to take these tenants. I will never go that road again. If you did I'd get the maximum security deposit my state would legally allow, have the lease in one person's name and have their parent sign also, let them deal with getting the rent from their roommates. I'd also do, at minimum, quarterly inspections. But all things being equal I'd rather do the first deal if I were you.
Definitely #1...it has a greater upside and if you can get into the short term rental market you'll do great. Get the house in tip top shape, furnish it and then market it to people needing a place to stay for a month or two. Typically those types of arrangements demand more rent too.
Good luck,
Q
I would buy both houses if I can get that much rent because it means cash flow and if you get HELOC, COSI or COFI financing with little or no out of the pocket money you'll be OK. Let the renter pay out that loan. To rent to students successfully, the key is the good deposit and if you can get their parents to sign out for them, even better.