I'm new here and new to out of state real estate investing. Already it is has been one expense after another. I purchased a home in an Ohio suburb for $98k. The home is in great condition and had some key differentiating features being that it had a large deck and it's a 3 bedroom plus office with 1.5 baths. I had plans to make some minor improvements, and of course once that started, things ended up costing more than expected. At this point, the home is costing me $107,000 all in (purchase price + improvements). I currently have a qualified renter (great credit, great rental history, dual income family of 4), who is willing to sign a 2-year lease at $1250/month on the condition that I install central ac in the summer. I'm concerned that I it would take quite a while for me to start to see returns on my investment. After the central ac install, I've calculated that it would take me at least 3 years to make my out of pocket expenses back.
Need advice on how to handle this. Should I let the renter go and hope for another renter who wouldn't mind a home without central ac? Should I put the house back on the market and cut my losses now? I can probably break even, or worse case scenario I lose a couple thousand after paying a realtor to sell the home. Or should I bite the bullet, spend more money to improve the property, and wait several years till I actually see a return?
Any advice is appreciated. Thanks!
It really only boils down to whether you want to make money or are in this for the fun of it. Tenants rent as is. if they don't like it as is they don't rent. It is always a mistake to agree to tennats requests.
Do not sign a 2 year lease with any tenant. If possible only use M2M, you never want a tennat to be in controle of you property and definatly not for 2 years.
At this price/tent I would say put an AC
What area of OH is it in ?
Could you break down monthly expenses/income to see if the numbers make sense ?
I agree, a two year lease would scare me.
Do other houses in the area offer central AC? If not, I would not consider it at this time. If so, you may need to bite the bullet.
Don't think just about recouping out of pocket. What about gaining equity, getting experience, having a gem of a house. If it cash flows I would probably not sell.