Sweet spot for Durham rental market.

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Sweet spot for Durham rental market.

Ben Kirchner
Durham, NC · Member since 2016 · 125 posts · 42 votes

Investors in Durham - Have you found a particular sweet spot in Durham in terms of your price range you'll buy a property to for rent?  $120k? $200k?  Just going of rentometer, it's rare to find something with estimated rent $2000+, therefore it would be difficult to find a 1% rent of a higher priced property.  Obviously there's several strategies, depending on who you're targeting - lower income, grad students, post docs, etc...

I'm currently looking for a new live in residence, which I will later look to rent out.  I've been house hacking currently, and would want to continue that.  Therefore, I had been eyeing a larger property in Durham that could accommodate 2 couples.  For that, it's looking like the prices I'm seeing is nearing the $200k price.  Which for the house hacking situation, would work out well.  My fear is it wouldn't cashflow well when we move out, a year down the road.

On a side note with the house hacking, ideally, I find a house where at least 2 of the bedrooms have attached bathrooms.  This seems to be hard to come by in Durham, particularly with SFHs.  If anyone has any insight on areas that may accommodate, I would appreciate a nudge in that direction.

Thank you

Ben

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  • Tiffany Alexy
    Real Estate Broker · Durham, NC · Member since 2014 · 236 posts · 168 votes
    9y

    As I'm sure you know it's a tough market for investors now. Hard to find 1% unless you're looking at a condo or townhome and even then the HOA fee will likely eat into it. I showed a client a 3 bed/3 bath townhome the other week. It had a basement master (basically a giant living area with fireplace and two closets with a bathroom that could make a great makeshift studio) and then a master bedroom upstairs, with another bedroom that had a hall bathroom right next to it. It would have made the ideal property for house hacking, and I'd imagine a great property to rent out down the road as you could potentially have 3 unrelated parties. It's easier to do that when they don't have to share a bathroom, and you can charge more per room.

    That's what I've found has worked, anyway.  The complex didn't have the ability to add a 3rd parking space (each townhome only came with two) so that was the main issue, but there was guest parking.

    I'm thinking something like that would potentially work.  But you're right, the market for $150K-$200K is tough and even if you can find them and house hack successfully, it's not necessarily going to be a cash cow rental unless you can finagle a strategy.

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  • Ben Leybovich
    Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
    9y
    Originally posted by @Tiffany Alexy:

    As I'm sure you know it's a tough market for investors now. Hard to find 1% unless you're looking at a condo or townhome and even then the HOA fee will likely eat into it. I showed a client a 3 bed/3 bath townhome the other week. It had a basement master (basically a giant living area with fireplace and two closets with a bathroom that could make a great makeshift studio) and then a master bedroom upstairs, with another bedroom that had a hall bathroom right next to it. It would have made the ideal property for house hacking, and I'd imagine a great property to rent out down the road as you could potentially have 3 unrelated parties. It's easier to do that when they don't have to share a bathroom, and you can charge more per room.

    That's what I've found has worked, anyway.  The complex didn't have the ability to add a 3rd parking space (each townhome only came with two) so that was the main issue, but there was guest parking.

    I'm thinking something like that would potentially work.  But you're right, the market for $150K-$200K is tough and even if you can find them and house hack successfully, it's not necessarily going to be a cash cow rental unless you can finagle a strategy.

     Yo! Nice to see you here, @Tiffany Alexy :)

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  • Tiffany Alexy
    Real Estate Broker · Durham, NC · Member since 2014 · 236 posts · 168 votes
    9y

    Same to you @Ben Leybovich! 

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