Investor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes
I am curious about the buy and hold markets in other cities in the US. I know there are MANY variables to this information, but let's attempt to keep it general for the sake of simplicity. In my town (Boise, ID) you could buy a basic duplex (2br/1ba each side) on the MLS for around $175K and rent each side for approx. $725. The vacancy rate in our area is about 2% and the population is around 400K.
Without getting into the details of any specific deals, how do those numbers match up with your town?
The numbers will vary wildly based on the neighborhoods in each city along with square footage, condition, etc.
With that being said, in Milwaukee, you can buy a 2/1 duplex off the MLS in a C or D class neighborhood for between maybe 60k down to 20k and rent would be anywhere between about $700 down to $500 per unit.
However the A and B neighborhoods are going to vary even more as far as price. For instance, in my neighborhood in Milwaukee, which is probably in the A- to B+ range, the 2/1 duplex you describe can be found for $140k to $180k and will rent for $750 to about $900
The numbers will vary wildly based on the neighborhoods in each city along with square footage, condition, etc.
With that being said, in Milwaukee, you can buy a 2/1 duplex off the MLS in a C or D class neighborhood for between maybe 60k down to 20k and rent would be anywhere between about $700 down to $500 per unit.
However the A and B neighborhoods are going to vary even more as far as price. For instance, in my neighborhood in Milwaukee, which is probably in the A- to B+ range, the 2/1 duplex you describe can be found for $140k to $180k and will rent for $750 to about $900
Here in Hattiesburg, ms you can pick up several newish duplexes for approx $135,000. They rent anywhere from $650-$750 per side.
I see resale being a pretty big concern There are numerous duplexes on our Mls that have been lingering on the market for over a year with no takers
My take on it is I can purchase a pretty decent single family home for $135,000 It will rent for right around 1% so $1,350 per month for sfr vs $1,300 for a duplex
Just doesn't make a tremendous amount of sense to buy a duplex in this market Twice the tenants to hassle with Much harder to resell Much more likely to have price appreciation with sfr... Most of the duplexes in our market also tend to be in rental developments which are pretty undesirable for resale and leasing
Hey All- thanks for the info. I'm very familiar with my area, but have almost no knowledge of markets outside my little corner of the world. In the replies that I've seen here, sounds like our market isn't the most investor friendly.
Steve- we've done a little looking around Portland and found that the rents aren't much higher, but purchase prices are about 30-50% higher and property taxes there are insane. Guess that's the price you pay for having no sales tax. Great city, though- I'd love to own some property there. I'd love to see more replies- thanks!
@Corby Goade Yes it really depends on what your real estate goals are. If you are looking for a place to park cash and hoping for appreciation I think Portland is great. But unlike things were here in 2009-2012, you aren't going to really cash flow well by buying a SFR to rent about these parts If your play is flips then I think it's a decent, if over-competitive, market for that and as usual most of the money is to be made on the high end which requires more capital, sophistication and risk tolerance. As I've said before I think the worst play in this market is small close-in multi's, simply because every would-be investor looking to get into real estate has that as their first wise idea and this "less sophisticated" money pays a premium for them within the city limits.
As far as property taxes go we are about average. I pay about 1% yearly on my hippest, most valuable close-in homestead, and closer to 2% on my blue collar rentals. So much for the lip service on "progressive" taxation.
I'm in Hagerstown, MD and you can get a double duplex (2-3/1's) for about $100,000 or less (depending on the area) and rent them for 900-950/mo. I just bought one last month that I will be all in around 95k and it is rented for 945/mo & 920/mo, with tenants paying utilities. However, we won't see much appreciation here. If you go 30 miles east to Frederick, MD, that same duplex would easily be 200k and rent for $1,100/side +. The appreciation there is much better and your tenant quality can be a little better. If you drive 1 hour west to Cumberland, MD, you can find property that hits 3% but that city isn't appreciating at all. Hope that helps.
I'm in Hagerstown, MD and you can get a double duplex (2-3/1's) for about $100,000 or less (depending on the area) and rent them for 900-950/mo. I just bought one last month that I will be all in around 95k and it is rented for 945/mo & 920/mo, with tenants paying utilities. However, we won't see much appreciation here. If you go 30 miles east to Frederick, MD, that same duplex would easily be 200k and rent for $1,100/side +. The appreciation there is much better and your tenant quality can be a little better. If you drive 1 hour west to Cumberland, MD, you can find property that hits 3% but that city isn't appreciating at all. Hope that helps.
Thanks Mike- good info. Sounds like you have some options in your area across the spectrum for buy and hold. The cash flow sounds pretty good. If we can get something going at 1% here, it's generally a pretty good deal.
In central WA you have to get above 4 units to get to 1% rent per month. A decent single-family won't cash-flow at all. $200k house - $1400/mo rent. Haven't bought but here and there for 4 years! Sure glad I started 12 years ago.
In Milwaukee you can buy rehabbed duplexes for 65k that rent for $1200 in B neighborhoods. I just bought a SFH last week though because they are a little easier to refi cash out.
We are buying distressed property in Michigan, SFR's, for 20-30k after rehab and renting them for $800+. For your 175k you could likely buy 6 of these and rent them for $4800 a month.....
In central WA you have to get above 4 units to get to 1% rent per month. A decent single-family won't cash-flow at all. $200k house - $1400/mo rent. Haven't bought but here and there for 4 years! Sure glad I started 12 years ago.
Hey Steve- sounds like your numbers are almost identical to what we see here in Boise. Thanks for the info.
We are buying distressed property in Michigan, SFR's, for 20-30k after rehab and renting them for $800+. For your 175k you could likely buy 6 of these and rent them for $4800 a month.....
Hi Bob- those numbers sound great! You do that from AZ? How much of a headache do you have in long distance ownership? Found a good property manager I assume? How often do you travel there? Do you invest in other parts of the US as well? Sorry about all of the questions!
Not many duplexes (where both sides come up) here in the areas I'm in. But my typical SFH deals look like this:
1) Purchase plus rehab (my costs) - between 90k to 110k
2) Rents between 1325 to 1650. 1325 to 1350 for the 90k to 100k. 1400 to 1650 for the 100k to 110k deals.
I even took down a 3/1, 1,000 sq ft hud home recently. Its the smallest house I'd own (currently, 1300 sq ft is the smallest I own). But its in a great area and I picked it up for 44k plus it needs about 20k in rehab. Should appraise out about 95k to 100k and rent out around 1050 to 1100.
Numbers are ok. But I wouldn't want to have too many homes at 1,000 sq ft. Thats too small.
Hi @Corby Goade yes we do it all from California. We have not been to see any of the properties other then Milwaukee and that one only because we have family there. We invest all over the Midwest.
NOLA has lots of duplexes...mostly in a "shotgun double" style. It was a very popular architecture type when a lot of building was going on in the early 1900s. Think of each side of the house and its respective rooms are all the same width and flow from one room to the next with no hallways. They were built that way to work like wind tunnels back in the days of no A/C. With the joke being you could open your front and back door, shoot a shotgun from your front door, and the shell would sail through your house and go out the back door without hitting anything.
Like anything else, the price/rent...but especially the price...varies by the neighborhood. You can pick them up, in rentable condition (or close to it), in okay/decent neighborhoods for $80K-$150K and they will rent for $1400-$2000/month total (many are Section 8, but those are market rates also).
More in demand A/B neighborhoods will run the gambut from $200K-$400K, and will rent for $2000-$4000/month total.
Rough numbers, of course, but that is about the gist.
It is also not unusual for residential buyers to purchase these types of home to live on one side and have a family member live on the other...or rent the other side...even if they have no intention of being an investor outside of that. So the resale is similar to and about as easy as it is for a SFH.
In fact, I started out this way and I was like, "Cool! I can buy a house and have the other side pay my mortgage and then some." Without any plan to do anything beyond that. But it has turned so fruitful, now I'm on the hunt for my 2nd investment property.
Here are my numbers from the Baltimore county area. You can buy a 3/1.5 SFR townhome in the $60-70k range. You will usually have to put another $10-20k into it to get it rent ready. It will then rent for $1500-1600/month as a section 8.
Here are some real numbers from a current deal that I'm working on:
Acquired the house from a foreclosure auction for $60k
NOLA has lots of duplexes...mostly in a "shotgun double" style. It was a very popular architecture type when a lot of building was going on in the early 1900s. Think of each side of the house and its respective rooms are all the same width and flow from one room to the next with no hallways. They were built that way to work like wind tunnels back in the days of no A/C. With the joke being you could open your front and back door, shoot a shotgun from your front door, and the shell would sail through your house and go out the back door without hitting anything.
Like anything else, the price/rent...but especially the price...varies by the neighborhood. You can pick them up, in rentable condition (or close to it), in okay/decent neighborhoods for $80K-$150K and they will rent for $1400-$2000/month total (many are Section 8, but those are market rates also).
More in demand A/B neighborhoods will run the gambut from $200K-$400K, and will rent for $2000-$4000/month total.
Rough numbers, of course, but that is about the gist.
It is also not unusual for residential buyers to purchase these types of home to live on one side and have a family member live on the other...or rent the other side...even if they have no intention of being an investor outside of that. So the resale is similar to and about as easy as it is for a SFH.
In fact, I started out this way and I was like, "Cool! I can buy a house and have the other side pay my mortgage and then some." Without any plan to do anything beyond that. But it has turned so fruitful, now I'm on the hunt for my 2nd investment property.
Thanks Jennifer! I love NOLA and have spent a good deal of fun time there, but haven't really dug much into the market. I would not be opposed to owning property there.
Here are my numbers from the Baltimore county area. You can buy a 3/1.5 SFR townhome in the $60-70k range. You will usually have to put another $10-20k into it to get it rent ready. It will then rent for $1500-1600/month as a section 8.
Here are some real numbers from a current deal that I'm working on:
Acquired the house from a foreclosure auction for $60k
Rehabbing it for $17k
Should be able to rent it for $1600/month
Thanks,
Scott
Are those SFR/townhome pre-1978? if so, do you make them lead free?
Do you update the kitchen and bathroom? your rehab cost looks low with kitchen and bathroom updates.
@Corby Goade, it is a fun town! Generally speaking, you aren't going to find cheap houses in decent/nice neighborhoods like other parts of the country enjoy. But rental rates are decently high and the rental market is really robust here. But one big negative is insurance. Property insurance is sky high here...second only to Miami...and most properties also require flood insurance. For example, my house is a double, about 2,000 sq. ft. total and insured for $270K. Just my property insurance is around $3100/year. Even considering the insurance, there are still a lot of good cash flow opportunities here.
Average neighborhood/Average rents:
Studios $650-$700
1-bedrooms $700-$750
2-bedrooms $800-$900 (I think Section 8 is somewhere in the mid $800s)
3-bedrooms $900-$1100 (Section 8 is usually around the low $1,000)
You can always buy a vacation home and AirBnB it, when you're not in town, lol ;).
in Raleigh, NC, the best you can usually find off MLS is about .8-.9%. A $160k home would rent for $1300. A 115khome would probably rent for $1000. You can get a $85k home that rents for $850, but they are old homes in C+ neighborhoods.
Yes, the property is pre-1978. I make everything at least lead safe but if I can do lead free economically than I will.
This property included only minor bathroom and kitchen rehabs. In the kitchen the only thing was appliances, new tile floor, and some minor electrical. The half bath needed a new vanity and the full bath needed some minor work on the linen closet and that was it.
in Conn we have 2 Duplexes in B+ ? town bought for $166,000 + 20,000 rehab Its 2 bedrooms and 1 1/2 baths each and it rents for 1,100 each apt for a total of $2,200 for each duplex (no section 8)
Bought another duplex in a Conn town for $72,000 renovating it for $30,000 total $102,000 . Its 2 bedrooms and 1 bath plus garage/ It is a C+ town? it should rent for $950.00 each apartment and might be a section 8 neighborhood.
Own another 2 Dulexes in a Conn. Its a B? town and its a 3 Bedroom 1 1/2 Bath with garage. It cost $200,000 for each duplex/ Its a 10 year old building and it needs No Repair and is in perfect condition. It rents for $1,100 an apartment and has tenants in place and no Section 8
Yes, the property is pre-1978. I make everything at least lead safe but if I can do lead free economically than I will.
This property included only minor bathroom and kitchen rehabs. In the kitchen the only thing was appliances, new tile floor, and some minor electrical. The half bath needed a new vanity and the full bath needed some minor work on the linen closet and that was it.
That makes sense. Which part of Baltimore county? Most I've seen need major rehab, new kitchen, new baths, electrical, plumbing and HVAC work as well.