Can't find a place - Not sure how to proceed.
I’m struggling a bit to find my first buy and hold property. I live just outside Nashville in a large and growing college town. I have $50k to invest into a rental property. My plan was to take $20-30k and buy one property now and see what I learn and then acquire another property at the start of next year.
Here’s the problem I’m having….There is a boom happening right now in the county. Homes under $175k are selling quick and many times well above asking. I’m hesitant to “jump in” just because I don’t know if this is a short term lack of demand problem, or something more long term. We just bought and sold a home in the county back in the fall and it was nothing like this. My area never really went thru a major downturn when the housing bubble popped. We just didn’t have much appreciation.
I had thought about buying a duplex, but there aren’t many for sale in our area, and the ones that are on the market are very old. Currently there is one built in 1960 for sale for $120k and renting for $675 per side which is reasonable for the area. My concern with a duplex is being limited to selling to investors and the appreciation not being has high when I do sell.
My realtor suggested I look at something newer since this is my first rental. He said that way I don’t have repair problems and I’d get a higher rent that would weed out some potential tenets. I kind of like this idea because then if I buy and decide being a landlord isn’t for me, I could easily sell in a year or two.
So here’s my questions:
- 1.Given the crazy boom that’s currently happening, should I sit for a bit to see if things cool some?
- 2.There are a couple newly built houses for sale for about $148k. I think I charge rent of 1% of purchase price (which is pretty common here). Plus I should see pretty good appreciate when I go to sell. Concern is that I haven’t read a lot where people buy new homes to rent out. Doesn’t seem quite as common.
- 3.Any other suggestions or opinions? Am I thinking about this stuff correctly?