First of all thanks for everyone - this is a great site with good people helping each other and sharing experiences.
I am exploring to invest around University of Memphis area and reading the posts. Seems like this is a very spotty area but if I stay within Normal Station borders , it is generally OK.. I have an opportunity to buy a 2/1 renovated property for 120K with projected rental income around 1250. It seems to be high for a 2 bedroom on a spotty area but if UoM is driving the demand , it is understandable .. I am OOS and not familiar with the area and rental dynamics.
I live in the Normal Station neighborhood and own two rentals in this neighborhood as well, so this is the area of my greatest expertise. I think you should examine your projected rent amount very closely. Even though I have heard of some 2/1 homes getting that much in rent, most 2/1 homes get $900 - $1000 in this neighborhood. Those that ask more typically have much longer periods of vacancy between renters, and often do not have renters renew their lease. If the home is nicely remodeled and/or larger than the typical 900 sq ft 2/1 in the area, you might could get $1250, but I think you will be disappointed with vacancy and turnover at this price point. A 3/2 or even 3/1 on the other hand should rent at $1250 - $1400 all day long.
You can probably find comps to support the $120k price and if the home is nicely renovated it may actually sell for that much, but I believe most 2/1 homes selling at this price are the ones selling to owner occupants, such as parents buying a home for Jr to live in during college. My experience is that the investor class homes sell at a second lower tier of pricing.
All that said, if you really want to increase the value of my homes, go ahead and buy for $120k, 😜 but I personally would look for a better deal - they are getting much harder to find in Normal Station but still come up from time to time.
I live in the Normal Station neighborhood and own two rentals in this neighborhood as well, so this is the area of my greatest expertise. I think you should examine your projected rent amount very closely. Even though I have heard of some 2/1 homes getting that much in rent, most 2/1 homes get $900 - $1000 in this neighborhood. Those that ask more typically have much longer periods of vacancy between renters, and often do not have renters renew their lease. If the home is nicely remodeled and/or larger than the typical 900 sq ft 2/1 in the area, you might could get $1250, but I think you will be disappointed with vacancy and turnover at this price point. A 3/2 or even 3/1 on the other hand should rent at $1250 - $1400 all day long.
You can probably find comps to support the $120k price and if the home is nicely renovated it may actually sell for that much, but I believe most 2/1 homes selling at this price are the ones selling to owner occupants, such as parents buying a home for Jr to live in during college. My experience is that the investor class homes sell at a second lower tier of pricing.
All that said, if you really want to increase the value of my homes, go ahead and buy for $120k, 😜 but I personally would look for a better deal - they are getting much harder to find in Normal Station but still come up from time to time.
I too live in Normal Station; Daniel is spot on with rental rates. I'd personally be more inclined to invest a little further south in the area called Sherwood Forest. I've looked at investing around Normal Station and the numbers just don't cut it for me; I've had great luck in Sherwood Forest.
That being said, the U of M does drive the demand and Normal station will always be a very safe place to invest in.