BiggerPockets

Hi.
I was offered to buy a home in Las-Vegas as an investment. I hope to earn mostly from its appreciation. The House costs 60,000$, and the rent is 370$ a month, guaranteed for the first year. I hope to sell the house for 100,000$ in Five years.
However, I am worried about the general situation of the American economy, which doesn't seem to be picking up jobs fast enough, and I'm not so sure that the rent will stay the same for future years (assuming I can rent it…). Do you think Miami is a good location for a second home investment, and represents a good return in comparison to the riskiness of this deal? Are there any other cities in the US which represent a better deal, as far as you've heard?

Thanks in advance

Craig

I also think that this is not a good deal

Spend some time learning this business before you buy anything. $60K for $370 in rent is a horrible deal. Spend some time reading in the Rental Property forum and it will become clear why. You could pay no more than about $15K for this house if you want it to be profitable.

Buying for $60K and hoping to sell for $100K in five years is very speculative. That might happen in a few selected locations. Area near where something in happening that would improve the value. I certainly have no expectations any property I own will increase in values 67% in the next five years. I suspect if any of us knew where such and area might be, we'd be buying and keeping quite.

Vegas is a good place to gamble. But you're more likely to turn $60K into $100K in the casinos than by buying a single house.

Last time I was in the Miami-Fort Lauderdale area (about a year ago) I never had seen so many for sale signs in an area my entire life. It is definitely a buyers market there. I personally feel a beach community would have more potential if you were going to speculate than Las Vegas.

I'm curious John, where did you come up with the maximum 15K purchase price to become profitable at $370 month guaranteed rent for the first year?