Lakewood/Tacoma, WA 1st deal help

9 Replies

My question is primarily directed toward those who are familiar with or who invest in the south Sound area around JBLM. I'm looking to buy my first buy and hold rental, but only have $15k to get started.

I've noticed that most of the affordable (read: cheap) property south of Seattle is in and around Tacoma. It seems like investing in Tacoma can be risky from a quality of neighborhood perspective, but I'm unfamiliar with the Tacoma/Lakewood border area. I found a FSBO SFR that seems like a decent deal and am looking for feedback.

The property is 1000 sq ft, 3 bed 1 bath asking $138k. Rents in the area for that size home look like they are $11-1300/mo. So, a couple of questions I have are: Does this look like something worth pursuing? What should I be aware of regarding that area, and more specifically the effect that a military base has on the local rental market? Which south Sound area have you found to be a better area for a rental?

Thanks BP!

I would say that $1,100-$1,300 is higher end for Tacoma. I know a lot of investors deal in Tacoma because its more affordable - and you see 1000 sq foot houses for $138k AFTER the home has been totally remodeled.

I would say to look REAL close at rental comps for that specific area because I had family who just moved out of a lovely 1000 sq foot 2/1 in Tacoma that was in a nicer neighborhood and rented for $750. 

Medium 07a777d9 0ba9 4025 8770 af3e7a1d7804Natalie Kolodij, Kolodij Tax & Consulting | [email protected] | 206‑456‑6962 | http://www.ReTaxStrategist.com

Pass. You will be in for a lot of headache work for this.  Save money to buy a quality property when the market tanks.

I have an 1120 sf rental in south tacoma that I am getting 1150 per month. It has very nice finishes inside and out and has two baths. Its in a B neighborhood. If they are done nice I think you can get a dollar a square foot up to 1200 square feet provided the neighborhood isn't too bad. I think your price point leaves no room for renovation. I haven't rented to military but I hear they are accountable to the commander if they get behind on rent.

(20-year Navy wife)

The base makes renting EASY.  A never-ending supply of potential good renters.  You will want to do your due diligence, of course, as young, single guys can be partiers...but many will be families who don't want to purchase because they KNOW they will not be there more than 1-4 years.  In addition, the military will hold them responsible for any damage they do to your property...even if it's more than the deposit you accepted.  They have "conduct" rules that supersede rental agreements...

That being said, you should strive to take care of your home and the tenants....many will end up being "single-parents" when their spouse deploys and won't have the extra money or know-how to keep simple repairs at bay.  Also, most states honor a deployment clause....if the member gets transferred more than 50 miles from the home, by law you have to let them out of the lease, if requested.  This can be mitigated by asking for copies of orders at the beginning to determine if they are ALREADY slated to leave before the lease would be over, and asking for them again if they try to use the clause...because sometimes the transfer is only for a few months (for schooling or something) and they may just be trying to get out of the lease.

In general, I would prefer military tenants (especially if they've been in for MORE than 4 years...meaning they committed to re-enlistment) over just about any other tenants....but I admit, I'm pretty biased on the matter. ;)

Medium star changer propertiesKaryn T. MD, Star Changer Properties, LLC | [email protected] | 5599976326

The terms of the owner contract will be critical. Payments over 30 years? How long is the term until you have to pay it off? The longer the better to give you flexibility.

$1,300 per month is on the higher side for that size of house in that area. Depends on quality of house/neighborhood.  

Originally posted by @Adrian Buck :

My question is primarily directed toward those who are familiar with or who invest in the south Sound area around JBLM. I'm looking to buy my first buy and hold rental, but only have $15k to get started.

I've noticed that most of the affordable (read: cheap) property south of Seattle is in and around Tacoma. It seems like investing in Tacoma can be risky from a quality of neighborhood perspective, but I'm unfamiliar with the Tacoma/Lakewood border area. I found a FSBO SFR that seems like a decent deal and am looking for feedback.

The property is 1000 sq ft, 3 bed 1 bath asking $138k. Rents in the area for that size home look like they are $11-1300/mo. So, a couple of questions I have are: Does this look like something worth pursuing? What should I be aware of regarding that area, and more specifically the effect that a military base has on the local rental market? Which south Sound area have you found to be a better area for a rental?

Thanks BP!

 check the comps real well. try rentometer.com or zillow rentals and see exactly what people are renting and for exactly how much. I only rent in places I am familiar with. I have lived in des moines to seatac to kent and renton. So I stay in those areas because I know the market inside out. I don't invest in tacoma, because I'm not familiar with the area. Also being a landlord in kent and having property that far south might be an issue. I like to keep on top of my properties. 

@Adrian Buck  

That house is in a ok neighborhood. Not bad, not great. It is on kind of a busy street. It is not so near the base that I would consider it automatically a military rental. I agree with Tim Holmes in our area $1/sqft often gets quoted up to X price point. Though there is considerable variance.

I'm very curious about the same issues....I will be PCSing to Lewis in a few months but will be looking for a nice Duplex or SFH to eventually turn into a rental....advice needed on best area to do that!

I would go for SFH units in Tacoma. Duplex and Quads are mostly overpriced and the MLS is flooded with overpriced multi-family units that does not seem to sell.

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