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General Landlording & Rental Properties

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Pat Clancy
  • Boston, MA
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Rental cash flow in a sideways market

Pat Clancy
  • Boston, MA
Posted Nov 3 2017, 07:53

Hi all,

First off, I'm a new member. Looking forward to learning more and sharing some of my insights.

I currently have one investment property, condo, generating $1,700/month with a mortgage/HOA around $1,000. It's been great, but I want to pick up a multifam next and keep growing my portfolio. I'm currently looking in several areas and one of the areas that has caught my eye is Auburn, Maine. I haven't visited yet but plan to do so. They have lots of multis for under $200K and I even spotted a few for under $100K that are close to turn key. One of them was a 6 unit for $180K... so I'm thinking, OK, even with low rents, that could generate some solid monthly profit. That one was delisted though.

What I'm perplexed with is why no one is capitalizing off this? Or maybe they are?

According to Neighborhood Scout, vacancy in Auburn is 8.9%. The average rent for a 2 bedroom is around $700, conservatively. Population is pretty stagnant at around 23,000 and it's been that way for around 20 years. Bates College is nearby, but it's very small and most people live on campus. I don't live in the area, but there are several property management companies that seem reputable. With 25% down, mortgage on $180K would be less than $1,000. Fully rented this thing would bring in at least $4K in rents. Even with one or two vacant, $2.8K should be easily doable and the monthly cash flow would still be there. Should I go for it? Or would you avoid Auburn, Maine.

TLDR: Auburn, ME looks legit for cash flowing rentals, but is it too good to be true?

Pat

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