Nashville, GA · Member since 2018 · 52 posts · 10 votes
Hi, I am new to Biggerpocket and looking at my first rental property. The property I am looking at is one bed one bath patio home located in class B neighborhood in northern Alabama. according to rentometer, the rent average about $850 monthly. the property tax is about $1100 annually, and HOA fee is $80/monthly that covers lawn and pest control, garbage, and pool access. I am thinking about making a cash offer on the house at asking price of $100,000 and hoping to cash out refinance later to buy another rental property.
Hi Jake- Just my opinion, why would you use cash when you could go conventional? You would want to keep as much liquid cash as possible. With the other 80k, you can purchase 4 more 100k homes.
Nashville, GA · Member since 2018 · 52 posts · 10 votes
6y
I agree with you Carmichael Lewis. It is just that the location is highly desirable and the seller already has a cash offer on it already. I think it has great appreciation opportunity. according to zillow, home value has risen 7.7% in the surrounding area.
Property Manager · Henderson, NV · Member since 2018 · 501 posts · 317 votes
6y
When deciding on using financing or cash I would think about what happens if you have a high vacancy? Would you rather be paying the mortgage and interest at this time? If you can afford it, I would go cash. As for the deal, I would take into consideration the age of the property and what you think maintenance will be like over the next few years.
Nashville, GA · Member since 2018 · 52 posts · 10 votes
6y
Thanks Michael for your opinion.
As for the property the roof, a/c unit, and water heater are about 10 years old. I expect to replace them within the next 5 years. That is about 5k-7k all together and I am hoping 1 year worth or rental will be enough to cover that.