Is new better

[Robert Setliff]

Is purchasing a brand new unit better than purchasing an older unit that may cash flow better? I am wondering if not having to worry about maintenance costs, upgrades to units, etc. would outweigh the difference in cashflow over time. The new unit cashflows $200 and the older unit cashflows $600 using the 50% rule. Thank you

[Joel Owens]

Number one mistake any investor makes is playing with the numbers until they talk themselves into buying a property.

Even though you will be doing PM work you still count that in your numbers. The reason is later on you might decide after a few years you are tired of dealing with it and want to use a PM. If you did not build that in as a cost from the get go your numbers will be messed up. Also when you sell your buyer might not be local or be an astute investor that always uses a PM as they have a higher use of their time. They will build in that cost even though you do it yourself and save the money. You want to appeal to all the buyers when you sell and also the bank will count in PM costs for the buyer for loan purposes.