Updated almost 9 years ago on . Most recent reply
Multi-family in rural Southern Illinois?
Hello all!
I'm a programmer looking to get into real estate. The property I'm currently considering is a 4 unit that I would house hack (unless I can get away with not). I've run some numbers in the BP rental calculator and it says that I'd have a cash flow of $538 using the 50% rule. I would be living there to satisfy the terms of the FHA loan I would need, so my actual cashflow would be ~0 for a year.
My Question
This property is in a small college town and I'm wondering how I would find out my vacancy rate as well as what I might be able to charge after some rehab work. I know this is question depends on many factors, but any insight would be appreciated.
If you would like to help, but need more info please let me know what info you need.
Most Popular Reply
Always happy to see another Southern Illinois investor on here.
If the calculator says you would make $0 because you live there. You still have to live somewhere, unless you know someone willing to let you live with them for free.
Either you are paying (or not paying) yourself, or you are going to pay a few hundred to someone else to rent from them.
Where do people go to find an apartment in your town?
Craigslist? Facebook? Local Paper?
See what is being offered there.
Also how many places are there for rent in the local area.
How close are you to campus?
Do students want to actually live there? I went to school at EIU, students had places they wanted to rent, even though it might have been a little farther away.
Then honestly compare the different units AND their layouts.
An awkward layout can kill people wanting to rent a place.
What is your competitive advantage compared to the other local rentals?
Do you or your competitors offer laundry hookups or an onsite laundry room?