First time LTR investor seeks new property in rural NC

Member since 2025 · 4 posts · 4 votes

I have been wanting to jump into the LTR market. I have a STR beach property that has been successful and looking for something more passive. My neighbor has told me recently he will sell me his home for $250k. My home is worth $280k and his home has better features, 2 car garage compared to my single. So likely would appraise for around $280. My question is this, with current interest rates I don't think I will make a profit as a LTR. It should rent for around $1,600 looking at other comps. I have lived in this area for around 17 years. A+ neighborhood. Great schools. I have read Rental Property Investing and am trying to crunch the numbers as best I can but still not super confident. Any advice appreciated! Ashley

1 Reply

108 views

Most Popular Reply

Janice Carter

Real Estate Broker · Atlanta · Member since 2024 · 1k+ posts · 608 votes

10mo

Ashley, it sounds like a great neighborhood and a solid opportunity but you are right to run the numbers carefully especially with today’s rates. If the property won’t cash flow as a long-term rental at $1,600 per month, you may want to negotiate the purchase price, explore creative financing or consider holding off until the numbers make sense. A great area doesn’t automatically equal a great investment, so trust your math over your emotions.

1 Reply

See this reply in the discussion

4 Replies

Jump to latestLatest

Sort by

Janice Carter
Real Estate Broker · Atlanta · Member since 2024 · 1k+ posts · 608 votes
10mo
Ashley, it sounds like a great neighborhood and a solid opportunity but you are right to run the numbers carefully especially with today’s rates. If the property won’t cash flow as a long-term rental at $1,600 per month, you may want to negotiate the purchase price, explore creative financing or consider holding off until the numbers make sense. A great area doesn’t automatically equal a great investment, so trust your math over your emotions.
1 Reply
Alfredo Gamboa
Member since 2025 · 1 post · 0 votes
10mo
Hey Ashley, thanks so much for reaching out about this incredible opportunity right in our neighborhood. It sounds like you've found a gem of a property with some fantastic upside, especially in an A+ location you already know and love! I'd love to help you lock this down. You're right to crunch the numbers carefully. It's smart real estate investing to be conservative with your pro forma, especially with current interest rates. Let's talk about that asking price of $250k. Given that your property is valued at $280k and this one has better features (that 2-car garage is a huge draw!), the current asking price seems quite fair—even potentially under market value at $250k if it truly appraises for $280k. That's $30,000 of equity you're walking into immediately, which is a fantastic position! Regarding the cash flow: You project rent around $1,600/month. Let's quickly run some ballpark numbers together. Estimated Monthly Expenses:
- Mortgage P&I: Assuming you finance $200k (20% down, $50k) at a competitive interest rate around 7-8% (depending on current market rates and your credit) over 30 years, your payment might be in the ballpark of $1,350 - $1,470 per month [2, 3].
- Taxes/Insurance/PM/Vacancy/Repairs: We usually budget a percentage for these.
  - Taxes & Insurance: Let's estimate maybe $300-$400 total a month (depends heavily on local NC rates).
  - Maintenance/Vacancy: A good rule of thumb is 5-8% for each of those categories, so perhaps another $160-$250 total.
Total estimated expenses could be in the range of $1,810 - $2,120 per month. Now, I hear you when you say $1,600 rent might not generate immediate positive monthly cash flow after all expenses are accounted for, especially the mortgage. That can feel disheartening when coming from the high returns of an STR [2].But here's why this is still an incredible deal:
1. Immediate Equity: You are buying a $280k asset for $250k. That is your first profit.
2. Long-Term Appreciation: You've been in this specific A+ neighborhood for 17 years. You know how solid the location is. Real estate values tend to trend up over the long haul, especially in great school districts [2].
3. Passive Income vs. Active Income: While the monthly cash flow might be minimal or slightly negative initially, you are exchanging active management (like an STR often requires) for passive wealth building via mortgage paydown and appreciation.
4. Rent Growth: Rents generally increase over time. That $1,600 today might be $1,800 in 2-3 years, quickly turning your neutral cash flow positive [2].
This is a phenomenal long-term wealth building play, even if it's not a cash-flow "homerun" on day one. You're building a portfolio right next door to where you live—talk about convenient management! The key now is to act fast and secure this price before someone else catches wind of how good a deal that $250k price point is.
0 Reply
Ashley Slate
OP
Member since 2025 · 4 posts · 4 votes
10mo
Wow! Super helpful points! I so appreciate your taking the time to do this!
0 Reply
Ashish AcharyaBusiness Member
CPA, CFP®, PFS · Sarasota, FL · Member since 2017 · 5k+ posts · 3k+ votes
10mo
@Ashley Slate, from a tax standpoint, the main thing to know is that a long term rental will not give you the same kind of immediate tax savings you get with your STR. With an STR you can use cost segregation and bonus depreciation against your W2 income if you materially participate. With a long term rental, you cannot do that unless you qualify as a Real Estate Professional, which is a much higher bar.

You will still get normal depreciation every year, which helps, but it will not turn a negative-cash-flow property into a tax win. So if the numbers are already tight because of today’s rates, the tax benefits will not make up the difference.

Long term rentals are great for stability and long-term wealth, but the tax savings are slower. So just look at this one based on the numbers, not the tax angle.

For the better interest, ask for seller financing deal.
[email protected]941-914-7779
INVESTOR FRIENDLY CPA®4.9242 Reviews
Website View Page
TaxMD® | Tax Planning Software
Website View Page
0 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.