Hello, I'm currently in escrow on my second single-family home rental property and am having trouble deciding whether to move forward. Looking for honest feedback here.
My husband and I currently have a rental property in the same neighborhood and are very happy with our CF. Hoping to repeat the process, we opened escrow with a smaller property in the same community, but the math shows we will be losing about $300/month for the first year or two due to interest rates/inflation of home prices in the area. We were ok with that initially because we figured we could refinance after some time and increase rent. Since then, we've learned that through the inspection, the central A/C unit is damaged (refrigerant leak, not blowing cold air) and we've asked for a credit from the sellers to replace the unit (that's it - we figured we would fix the other issues on our own). They are saying they will service the A/C which could fix the issue for a year or two, but ultimately we are stuck with the cost of the replacement.
My question is - should we eat the cost with the knowledge we have for now to take advantage of what could be a good long term investment? (Potentially $10,000 more than we were prepared to spend on top of coming up in price on the house) We are hesitant due to knowing we won't be cash flowing initially, we are entering summer time, we're hoping to rent it out ASAP and know this will be an issue eventually. But at the same time, the community has appreciated rapidly in the past 2 years and we feel will continue rising.
We are just afraid to back out of this opportunity over $10K, but we are also weary as this could make our financial situation more difficult for the next year or so. We are trying to negotiate for a credit from the sellers but they aren't budging.
Thanks for your input in advance!