Looking for feedback on My First Real estate Deal.
Currently working to buy a Property in a college town that I am an Alumni from, in Western PA.
Smaller University about 6,000 undergrads. THis will be a student Rental
Purchase Price 113k
5 Bedroom, including third story finished Attic (2800 Sq Ft)
Rent $2,600 per semester $5,200 for year. $500 summer lease
-this is around average rent for off campus house with Utilites included
Yearly maintance- $1,000
NOI based on Semester Rents Without Summer leases and late fees $26,000
Purchasing Home with Primary Home Equity. All profits will be dumped into Equity annually until Loan is repaid.
Any Cap Ex funds needed will be pulled from equity as well.
FeedBack would be great! again this is my first investment property. Exit is to hold house for 10 years and sell to 1031 into larger multi family deal.
Have you plugged it into the bigger pockets calculator?
Here are my observations/notes:
- Insurance at $2,050 - this way too much for a SFR. Shop around, you should be able to get a property insured for less than $800/year
- Yearly maintenance - this seems low. Assuming there will be several students sharing this property, and the nature of your tenant, I'd assume that there will be much more wear and tear on your property than $83/month. This is especially true, since you can potentially have 3 tenant turnovers a year and will need to do some sort of make-ready repairs at each of those times
- Missing vacancy - you're assuming that you'll have to problem renting the property out every semester/summer. What if this is not the case?
- Missing property management - are you going to self-manage this property? If not, you'll need to factor in your PM costs
Hope this helps!
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