I am new to the real estate world and seeking advice. I am trying to purchase my first rental property. It is a 4-plex for $65,000. Currently, all 4 units are rented and the total rents add up to $2,265. 1 tenant has been there for 20 yrs, the other 5 yrs, and the others about 2yrs. The tenants pay their own electricity. The landlord pays the water, which comes up to $2600 annually. Also, the landlord pays about $360/month for heat. The taxes are $4600 per yr. I plan to hire a property manager, who charges 9% of the gross rental income. Do you all think it is a good deal?
Assuming that $65k is actual market value and you are paying cash I'd say it's a good deal. Without knowing details and how much work the property needs with the numbers you provide your monthly cash slow should be around $760 which is 14% cash on cash return.
Try to use rental property calculator and see what else you need to factor in your calculations
@Yuriy Skripnichenko :
Thanks for the response. I appreciate the advice. I ran the numbers through the rental property calculator and there is good cash flow. The property is in decent shape; it may need some minor repairs. There appear to be no significant problems and the roof is less than 10 yrs old. I plan to have a home inspection sometime. My overall impression of the property is that it is solid. I am leaning towards doing a cash purchase.
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