New rental investment in WA - Spokane area?
Hello,
I am new to rental investments and am considering my first rental property in WA. I'm considering a budget of $100-150k. I am currently in the Spokane area and was recommended to look into Perry District. I am new to WA (from southern CA). I have a few questions about this scenario:
- Is this budget realistic for a quality rental property in a quality neighborhood in WA?
- What do you think about Perry for rentals or are there any other Spokane neighborhoods I should consider in that budget?
- Other areas in WA that might be good for that budget?
- Should I focus on single family homes or condos in that budget?
Thanks in advance for your help!
It really depends on what you mean by "quality rental." Do you want a home with a high cash return? Are you investing for appreciation and tax write-offs? Do you want a turn-key rental? How are you going to be financing?
There are certainly rental properties in that price range around Spokane. Perry is desirable, at least in part, because of the character of the older homes - with that is pre-1900s home maintenance; Logan is great because of Gonzaga and Moody schools; Hillyard and West Central Neighborhoods have good value rentals with a little higher turn-over rate. There are great rentals all over Spokane, just depends on your specific situation.
Since you are in Spokane, you might drive around some of those areas and see what kind of homes are there.
I can't speak for Spokane, but it seems that there is a market for anyone in Washington. "Driving for dollars" definitely can payoff.
@Deric Lamphiear I appreciate your recommendations. I will definitely drive around those areas and get a feel for them. How is the rental market in Spokane vs other areas in Washington?
Your questions to me are somewhat difficult to answer because I am new to rentals but they give me more to think about, for which I am grateful.
- High cash return - I believe you mean the monthly cash flow - yes I would like cash flow, eventually I would like the cash flow to be a modest part time steady income. Initially in the first few years I would like to use the cash flow to either put back into mortgage or else to help pay for the next property, whenever that is.
- I am not sure how to answer your questions about appreciation and tax write-offs. When would I want either? I would like the property to appreciate as I hold it obviously, but I am not sure if that's what you're getting at. And I would like any tax writeoffs that I could get... but are you implying there is some tradeoff?
- Turn key rental would be ideal. However I would be willing to put some modest money and a little time into repairs. I guess I don't want to spend a significant budget or time to fix up a property as it's my first rental. However I am not sure in this market what kind of value difference I'd be looking at with my budget. I would definitely like to find a deal below market value as that would reduce my risk.
Thanks for humoring my newbie questions!
@Noel Ruiz (sure wish that would work in app) I think the spokane market is a great market to be investing in, just running numbers off basic finds on realtor.com site decent cash flow and that's not doing the hard work of driving for dollars, or direct marketing, or other ways of finding killer Deals.
I like the perry district, I think it's a cute up and coming area, and I also like browns addition. I think there are tons of good areas around to look at though.
So with that said, welcome to the area and good luck in your endeavors!!
@Account Closed there are a few options and strategies to move forward with, however Investing in a turn key rental property is by far the easiest strategy for B&H and has the least risk volatility. A turn key property should already have a tenant paying rent in the location and have a property management company familiar with the location and have an application list for new tenants. This is extremely beneficial if you are a new investor. The best market throughout the US with the lowest active management costs, trending upwards for employment and population growth, low property taxes and insurance and high rent by ratio with high cap rate would have to be Jacksonville, FL. you can pm me for more info..
Hi @Andy Audate thanks for that insight. As a newbie I hadn't thought of turn key in those terms, I was more focused on the property itself, not so much the property as an ongoing business. Thank you for that tip!
What type of investment strategy are you going to use? Buy and Hold?
@Andy Audate, Yes I would like to do buy and hold and make this a part time job but not a lot of hours spent each week, so I think buy and hold with a property manager makes sense for me. I'd be interested to do some fixing upping in the future but to start out I think something turn key or close to it and getting cash flow going is a good way to start out.