I am buying my first property. I found 1 that's about 30k in Columbia SC. rehab would be between 5-10k. Contacted the realtor and he told me the HOA is about 350 per month. Yes high. They only have a community pool. He also told me I would have to pay a 6% yearly tax since I would not be living there. So right off I would be out 500 bucks. I can safely rent for 950. I am paying cash but would like to BRRR. the reason I picked this is because it's a townhome so I don't have to worry about the roof/ foundation/ or other structural issues. Can someone give me some advice?
@Nailah Williams Does your business model work with numbers you just laid out? a few things to consider are: property management, insurance, vacancy and maintenance. For my math that puts your net monthly at around $150. That's without a mortgage payment.
in my humble opinion... that HOA is too high and makes it not a viable investment property at that rent rate. BUT, if $150 is what you need then you are good.
Why ? This is a lousy business strategy
@Nailah Williams $350 seems incredibly high for a townhouse. Just remember with HOAs, they can always raise the fees and you have little to no say. I have a couple condos and if I could go back I'd never buy something with an HOA again. Fess have increased almost every year on one of them. Just something to consider if your margins are already thin.
Does the HOA even allow you to rent the property if you buy it?? Many HOAs are run by people that get high off of authority and pass bylaws stating it can't be used as a lease or you must live in it for x amount of years before you can lease it. Nothing like other people telling you what to do with your own property.
There's no meat left on that bone... You can get a better ROI elsewhere