Pay more for better property or settle for property with issues

[Zachary Kingsberg]

I am looking for 3/2 SFH in the range of $160-200k. I am noticing however the rent prices are very similar between both ends of the spectrum. The $200k house has cleaner finishes and would rent easier. However I am looking for a deal. I found a house sitting on the market it is updated but has the following issues:

1. Master bedroom is smaller than the other rooms

2. Master bathroom is small

3. No bathtub in house

4. House had foundation repair in 2018 with 10 year warranty (living room floors are a little wobbly)

5. Lot next door is empty with tall grass (potential rodents and future construction)

6. Sellers have also listed property for rent for $1650 and have had trouble renting it

Based on these issues, is it worth it still to potentially save $30k versus a similar type property given the rents are similar. Or does this sound like a disaster waiting to happen? Any advice would be greatly appreciated. The house I am looking at is 3226 San Paula Ave

Dallas, TX 75228

United States.

If anyone would like to look it up and provide feedback. Again, I am looking to potentially acquire this property around $160k as a rental investment and trying to determine even at that price if it is worth it given the minor deficiencies! Thanks

[Evan Polaski]

@Zachary Kingsberg, I cannot speak to these two properties specifically.

I would be looking at zillow, apartments.com, etc to see what other rentals in area look like.  $1650/mo is clearly too high if it isn't rented very quickly.  Looking at the comps should give you a better idea of what real rents are for either house.  Then as mentioned, you need to calculate backwards into what the price should be.

Personally, I don't like turn key properties.  I want something where work is needed, because there is margin to be made in having work done.  Turnkey means you are paying someone else's profit, and your cash flow is therefore typically lower.