Hello Everyone my name is Mike and I just started reading BP a couple of weeks ago.I have been just browsing for a while and finally decided to introduce myself.
Currently I live in NY but I am looking at the rental properties for sale Irvington NJ area since the prices look very attractive. I am fairly new in investing and went to see a few one and two family houses yesterday that are on the market and priced under 100K but the taxes are kind of high 6-7k a year. It doesnt seem like a great area and I would not want to live there myself. Houses are not in good shape but rented by section 8 tenants. Now here is the question, should should a new invester invest in this area? I can make about 1K a month after all the expenses and property manager fee with investing 100K cash. These houses were sold for way more in early 2000. I really appreciate any input.
Welcome to BiggerPockets, @Account Closed . To really analyze your deal, I'd need more numbers.
Does your $1,000 a month come after you account for CapEx, taxes, vacancy, and all the other little expenses that nickel and dime your bottom line? Do you know what property management company you will use? Are you comfortable with accepting Section 8?
Could you spend a little more money and get a better property? Do you have an investor-friendly agent who can help guide you to the better areas of town?
Mike Gup I would not buy a rental with 6k a year in property taxes the risk is too high if you have a vacancy your going to be paying out of your pocket $500 a month in taxes.
Their are other cites with lower property taxes... Look into Philly.
Based on what others see, the $1k in cash flow sounds quite high, given you have at least $500 month in taxes, although you did not give any projected rent numbers. Also, if the houses are "not in great shape", then you are likely in for expensive repairs and replacements (roof, flooring, etc. referred to as CAPEX).
I would advise you do some searching on BP and read up on Section 8 tenants. I personally think that would be a rough way to learn. Some can make money on Section 8, other don't bother or have been burned (I don't rent Section 8 and never will).
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