Looking to buy my first rental

17 Replies

Do they really rent for that much?

Have you looked at financing? What kind of interest will you pay? How much down? Don't use the calculator on redfin unless you can get the same rate/payment.

I think I'm pretty close as far as rent, based on two things: friends currently renting in the area and a craigslist search with a fair number of rental properties within a couple of blocks. 

My rate will be higher than redfins, 4.2ish, and I'll put down 20-25%. 

Recent rentals in the area are... 

$3200 4/2

$1950 3/3

$2200 3/2

For that kind of money the place should be nicer. Furnace looks small. good location, maybe youll get some appreciation. That 22-2400 number seems bloated. I have properties all over the city, remington the nicest, i get to 1400+ there, a 1000 jump for federal hill seems excessive. 

Be prepared for a sharp increase in the property tax assessment.  Taxed at 2.3% they can eat you alive.  The current assessment seems low at $156k and Baltimore City WILL raise them eventually, even with no improvement in the local market.  Crunch your numbers and make sure your deal can survive an assessment increase to $250k.  (That would cost you $2,100/year!)

Originally posted by @Matt Schelberg :

Be prepared for a sharp increase in the property tax assessment.  Taxed at 2.3% they can eat you alive.  The current assessment seems low at $156k and Baltimore City WILL raise them eventually, even with no improvement in the local market.  Crunch your numbers and make sure your deal can survive an assessment increase to $250k.  (That would cost you $2,100/year!)

 Good point about the taxes. That can sneak up on you in Baltimore City and I always forget to consider how the taxes will change once they see the new price/value. $2,100 per year is $175 per month, GONE, poof.

I just did a quick look up on zillow and unless they are totally off ( which does happen ) it says the rent will be approx  $1550.  Just make sure you do your due diligence to find what the real market rent is.  You dont want it sitting vacant because you are asking too much, nor d you want to buy something, thinking you wil be getting an extra $1000 that never happens.   Best of luck

I agree with Account Closed The rents seem a little high - this is a small place. It also is not a high end rehab. You are barely hitting the 1% rule with the rents as stated. Personally I would want to be all in at 1/2 of the asking price. 

If you don't want or need cash flow now then it could be a reasonable appreciation play.

Originally posted by @Scott Kronzek :

Thanks for the help guys. From a strictly rental/income perspective, I'm having a tough time finding anything that even meets the 1% rule. What do you Baltimore people think of this? https://www.redfin.com/MD/Baltimore/815-S-Curley-S...

Might rent for $1450-1500?

If you are looking for cash flow, you should look for different areas. Fells Point, Canton, Fed Hill, all are  expensive. Unless you get luck, you will not get %1- %2 rule in there.

Scott, I️ have a 3br 2ba rental in the Fed hill area on the 1700 block of William st that I️ rent for $2300. However, it was a high end rehab. $800/room is becoming the standard in federal hill though for a nice place. I’d suggest checking out pigtown and ridgelys, that’s where I’m looking right now. Let me know if you have any more specific Baltimore questions!

another thing to look out for, especially in that area, is if they count the basement as a bedroom or not. that can totally screw up the numbers either way. some agents count it, some don't. there's not much punishment on those who count it when it shouldn't be legally considered a bedroom. just a thought for when you're looking at your numbers

Originally posted by @Scott Kronzek :

Thanks for the help guys. From a strictly rental/income perspective, I'm having a tough time finding anything that even meets the 1% rule. What do you Baltimore people think of this? https://www.redfin.com/MD/Baltimore/815-S-Curley-S...

Might rent for $1450-1500?

Hey Scott,

                       If you're curious about what things will rent for in Canton you can always reach out and I should be able to get you pretty close as I've lived here for quite some-time. When it comes to straight location, this is a great property. You're about 3 blocks from the "Square" which is a very popular place for neighborhood drinking/bars. In my experience, its not often that rentals in Canton sit on the market very long if they are priced appropriately. Notice, I didn't say low, just appropriately. This property is on a street that runs N-S and they tend to be more narrow and the properties are slightly smaller. 

                      If I was looking to purchase this as a rental, my mindset would be on the "roommate" factor, not necessarily the overall MP of rent. What I mean by that is, "How much would I be able to get, per bedroom"?  A lot of younger professionals in this area budget according to that as people living with multiple roommates is very very common. In my opinion, this property would average around $675-$725 a room. On the low end, you might be looking at 1425, high end maybe 1500 ish?

                   Now, I can't really see what the alley looks like. However, if you are able to create parking in the rear you would get wayyyyy more. Parking in Canton is HUGE. A rooftop deck would also add about $100-125 a bedroom. I don't think this property would cash flow very well at that price but anything in the area will probably appreciate overtime. This is all just opinion based on my experience in Canton, hope that helps!

               PS: If you're interested in seeing what rooms go for in that and surrounding neighborhoods, there is a Facebook group called "Roomates and Rooms in Canton - Patterson Park". I'm not sure if that's the exact name but it should pop up fairly quick.

@Scott Kronzek As a local here in the area, I can you tell that the Curley deal isn't fantastic as the rents you'd be getting won't be close to the 1% rule, but you can upgrade the house to push for a luxury feel, increasing the rents. 

Now, if you go with the Airbnb strategy and you are able and willing to be active in turning around the unit on time and price parring with other Airbnb'ers (and they are many around here), then that could be another strategy you can start exploring. Good luck! Let me know how I can help you.

I have a place up the block, no ways its getting 2400, probably, 650-700 a room max

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