Investor · Fredericksburg, VA · Member since 2015 · 20 posts · 2 votes
I am looking at a new property in Greenville, SC as a buy and hold. I live in Virginia. It's under $200K, no maintenance, no rehab as the builder is on the hook for it first year. I did the analysis and it looks like I can rent if for $1500 per month the numbers look like they work. Am I missing something all you pros out there? I am new at this but I have done my due diligence. Anyone interested in taking a look at the analysis and commenting before I dive in? https://www.biggerpockets.com/...
@Linda Conrad Two different questions here: 1) Are new properties a good investment? 2) Is this particular property you're analyzing a good investment?
The answer to the first question is absolutely. These properties are typically priced higher because someone already took the risk and completely rehabbed or built them. One of the main benefits (assuming the builder/contractor did a good job) is your capex and maintenance will be low for many years.
The answer to the second questions is absolutely not, unless you are 99.99% confident on the appreciation. $69/mo in cash flow and under 2% cash-on-cash return is very low. You also budgeted $0 for maintenance and capex. While these % should be low I would assume at least5% combined in the first 3-5 years. Everyone has different goals, but I would imagine you can find properties with at least 8% cash-on-cash return in your market.
Jon - Thank you so much for the insight! I will make the adjustment. I was happy with 2% if the appreciation and depreciation (taxes) were also benefits. Normally, when the build a new subdivision the first few are lower priced so I assume it will appreciate. Right now, I have no tax deductions so the depreciation would be nice.