Hey all my name is Brett and I have decided to buy my first investment property. I'm currently looking at a house that's listed for 125k they won't budge on price assessed at 123k and the house is nice and located near 2 hospitals. This house could net between 12 to 1400 dollars in rent. Should I pay the 125k? Are there concessions i should ask for to make it a better deal for me? Should i look at other options? Would love to hear your thoughts.
Definitely depends on the area and the how much maintenance the house will need while being rented. The area I invest if a property is bring in around 1200, I wouldn't want to pay more than 90,000. Make a spreadsheet and take your total rent and subtract vacancy, mortgage, capital expenditures/Maintenance, Tax, insurance, and property management (You always want to include this just incase down the road you end up using property management). Look at the yearly cash flow coming your way and divide that by how much money you put into the deal. You definitely want more than 8%.
If you could definitely get around the 1,400 then the deal looks better. Has the home been on the market for a long time? If it hasn't let it sit for a few weeks then throw another lower offer. Don't force a deal. There are always more opportunities.
Again, I don't know the area so don't take what I say as completely correct. I'm new too!!!
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