Is the price tag too high for a first rental property?

[Andrea Davies]

Hi! I am BRAND new to the game. Been researching and learning like crazy, but I am in a good place with money and investing will be a side gig for me. What started out as simply wanting to purchase a mountain home in a neighboring state has turned into a completely changed vision. I am looking in Blue Ridge, GA and the market is very hot and obviously prices are high. I am interested in doing STRs. I've been running rental reports and just joined Bigger Pockets yesterday (after listening to the podcast for a few weeks now). Am I crazy for wanting to purchase a 3 bedroom mountain home for 879,000 for a first investment? Gross Rental last year was over $76,000 with 305 nights occupied. This property is completely turn key with an agency already in place. However, they take about 38% cut. Its difficult to look for something with a cheaper price tag in this hot market that will bring in a cash flow. Should I start smaller? 

[Patricia Steiner]

Forget the price for a moment...what's the ROI? Why are you doing this? Is this a part-time vacation home with a rental opportunity when your family isn't using it? The agency cut is too steep for me...that's a partnership without a capital injection on their part.

My recommendation would be to do the math...if you buy it, what with be your NOI. I would also explore other property management solutons than the one is place. Again, the question isn't price. It's "is it worth doing."

Best...