Is this a good deal?

3 Replies

Hello,

I am just starting my real estate journey, but I came across a townhome I really enjoyed/ have been doing research on it for the past couple of days. To me, it looks like a good first starter cash flow property, but I would like to see ya'll's take on it.

I found a 3br, 2 bath townhome for around $115,000 in Charlotte, NC area that would serve as a great family home/ potential home for graduate students near the university and the rent in the area off Zillow staets an average rent of $1300 dollars.
$
HOA is at $140 ish range.

All in all, expenses with this house would run around $800 - 900 monthly and rented out would net me around $400to $500.

I have family support in Charlotte, and I have reliable people I have trained to check on rental applications and interface with me/ I can also go to the area if need be to make sure things are running smoothly.

I am just starting out here so any advice will be appreciated!

@Kyungjun Park I would be very careful with townhomes because HOA's can make your life a living hell with regulations and rules. Generally most people stay away from them but I have heard and spoken too people who have made a killing with townhomes. However with that said most of those people rent it out on a nightly/weekly basis using Airbnb. I wouldn't trust Zillow for statistics though because there numbers are usually very general and won't apply to your exact criteria. That may be the monthly rent for houses and apartments in the area which would not be comparing apples to apples. Make sure if you pull the trigger that the people you are trusting with your property are people you trust with your life. Out of state investing can be a nightmare if you don't have the right people in place to help you. Make sure you do your due diligence on the people as well as the property. I hate to be mean but just because they are family does not mean they are good people. I have plenty of family members that I would not trust to take care of a property for me because of their poor work ethic and morals. The numbers seem decent and it fits the 1% rule but make sure you are not being optimistic with your numbers and are being as picky and exact as possible. Good luck!

Are you accounting for vacancy, maint & PM costs? Between those & rising HOA rates I feel like you would be squeezed. I don’t really look at SFH but at that rent I would think you’d want to be closer to $65-80k on that house price.

Hi @Kyungjun Park

Its always great to have "reliable" folks on ground.

I would consider what @Michael Guzik and @Dennis W. both said. Now because Charlotte is a sellers market, we are seeing a lot of less than One Percent . It all depends on the ROI you are comfortable with. Have you considered renting by the room to students to get more return?

Call the HOA to see if they have reached their maximum rental limit before you buy.

I'm an investor and REALTOR in Charlotte NC.  Feel free to reach out.

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