Personally I'd go for the newer duplex especially for your first rental.
- unless you're doing most of your own maintenance, the lower maintenance costs are attractive
- Older houses split into rental units often come with shared, landlord paid utilities which I hate
- You'll have less turnover in a newer, nicer place
All of that to me means more cashflow upfront which you can save up for the second rental.
Thanks a lot! So you wouldn't be scared away from the fact that the newer option isn't currently rented? I think it's a great place that could be easily rented out. My husband is more risk adverse and worries that we need to find 2 new tenants right away and don't have rental history for the property.
To paraphrase Che Chei Wong. Believe in abundance verses scarcity. There are good people that need a good place to live. I have an older SFR and a new duplex. I prefer the newer duplex over my older home. Good luck. You will find good tenants in a reasonable time.
Yes I agree, you'll find tenants unless your area is very depressed. If it makes you nervous though, you should do some research and see what market demand for rentals is like in your area. How many ads for rentals are there on craigslist now versus a year ago? You can do the same for your local newspaper if you still have one.
Also find out who the biggest property managers are in your area. Call some realtors and ask if you can't find out another way. They usually have websites where you can monitor how much inventory they have and what they are charging for rent.
I keep tabs that way in my town and right now we are at multi-decade low vacancies. This is due to the fact that nothing has been built new here in the last 8 years and the unemployment rate has come down substantially.
This is so helpful, I appreciate it all very much.
If I look on Craigslist and can literally find only ONE rental available in the city we are looking, is that a good thing or a bad thing? I take it as there is a high demand but maybe I'm wrong. It's a relatively small town but I know there are people looking to rent everywhere. Where can I find info on rental prices if there aren't any listed for rent?
Wow, I looked up your town, 5000 people is pretty small. I only saw 1 rental listed anywhere as well. I'd say your best bet is to call some local realtors and ask who does property management there if anyone.
Ask yourself who is moving to Evansville and why. You want to make sure you're not investing in a place with negative population growth.
I see you're not far from Madison. That's probably a great rental market but the properties are probably expensive right now. Looks like you're only 30 minutes away so probably a bedroom community for Madison? If so I'd say that's a good sign.
could you provide more details on the numbers for these houses like price and market rent? Have you thought about getting involved in the Madison Real Estate Investors Association?
The duplex we are looking at is listed for $159K. 2 bed/2 bath each side with large yard and attached garage. Newly renovated. Our break even looks to be about $1100-1200/month. We're expecting to rent for around $800/month each unit.
The older multi units that I was referring to were in Janesville and quite a bit cheaper ($110-120k). However, it has been determined that we'd prefer to stay out of that neighborhood and stay away from super old homes, especially for our first.
Jeff, we are definitely not looking to buy in Evansville...for that very reason! :) And you're exactly right- most of Madison's suburbs are bedroom communities.
I invest in Rock County as well but only stay inside city limits of places larger than 30,000. I haven't had a unit go vacant more than a week or 2 in these areas. I'd be nervous owning a rental in a smaller town (Though I have never done this) for those vary reasons. Just looking at your numbers, what is your projected cashflow with these places?? When I see numbers like these I tend to wonder how the owners continue to make the investment worth while.
If you are worried about buying a vacant property, I may have a Duplex you might be interested in? It's a newly remodeled (Last December) 3bd/1ba & 3bd/2ba Duplex off Milton Ave in Janesville and is rented out on yearly leases for $875 / $625. I was just talking to my wife about potentially selling it as we have quite a bit of equity in the place and are looking to purchase our first 8-plex. It's not currently on the market and have been hesitant about listing it as we have never sold a property before. The 2015 Tax assessment is at $139,000 and we decided we'd let it go for $110,000 as anything less would just make more sense to keep it cash flowing in our portfolio and wait to save up enough for the down payment on the 8 plex. If you're interested looking at it or have any questions on renting/investing in Rock County just shoot me a message. I'm always happy to talk real estate!
@Chris Heeren. I am interested- just sent you an e-mail!
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