Good afternoon you all. I'm coming here to ask for a little advice. In the backyard of the house I currently live in in Albuquerque, NM, there is a small 1 BR casita. It is not currently livable as I have been using it for storage and to play music. In order to make it rentable again, it would cost between 15-20k. From what I have seen from comparable rentals, I could expect to rent it for around 550-650 (although I could be off because I have never done this before and I am not an expert). The house is paid off and I am looking to start investing in rental properties.
Would this be a decent investment opportunity? What questions do I need to take into consideration? Is there anything I should research or are there any good resources I should look into?
Thank you for your help and have a great start to your new year.
@Josh Baca That would be a great place to start investing! With the house paid off there is no mortgage payment to worry about during your rehab. The returns are great! at 650 a month your talking about adding almost 8k to your income. Not only will you have your entire initial investment back out in a little over 2 years but you will also have built in additional equity to your house, and gotten some great tax write offs along the way. For your first investment this should allow you to get your feet wet with out hardly any risk and get huge returns. My only question is what in the world have you been waiting for?
That must be the biggest casita sounds like a lot for renovations What is the breakdown on the project
@Leland Titus Thank you for your response. The main reason I have not done it in the past is that I was using it to play music with my band and to rent something similarly sized would cost a few hundred plus time and travel. Sounds like the sooner I start this project, the better.
@Account Closed The casita is not huge but it is rather old and would pretty much need the works ie new kitchen/bathroom/roof/windows/heating/cooling, wiring redone. You name it, it pretty much needs to be done. I don't really have anything broken down completely. I have had a few contractors take a quick look and give a really rough estimate on my casita while they were looking at my main house.
Thank you both for your responses.