Ok so I found a place that I'm thinking about jumping into.
This is a town house that I plan to live in for a year then turn into a rental.
240montyly HOA a bit high for the area
This size unit rents in this area for easily 950 maybe 1000 -1100 rent if updated a bit my
mortgage plus Hoa would be about 750
Any feedback would be great thank you!
I Always take worst case scenario. That way i feel more prepared to let's assume you only get 950. And mortgage is 750. That's 200 bucks in cash flow. Does that 750 mortgage include insurance and taxes? Either way, 200 bucks is too slim for me. Is there laundry in unit? What if you have to replace an appliance? With a 200 buck margin. That gonna be tough. What market is this in?
It's ok, but I think you can do better in the valley. The mortgage plus the HOA plus random expenses would make it cash flow negative or break even each year. The Phoenix area is a hybrid market providing rental income and appreciation. The appreciation has been great the past few years but I consider it a bonus and consider the rental income a better indicator of whether to buy or not.
Personally I focus on SFR Single Family Residence. It is easier to find tenants for the SFRs and you will receive a premium for the yard and privacy vs a town house or condo. The SFRs also seem to appreciate at a better rate, while condos tend to be the last to appreciate and the first to decline in a bad market. I try to buy 4 homes a year in the valley. In this market you need to be fast with your offer (24 hours of a deal coming to market) or very slow. :) What I mean by very slow is making low offers on homes that have been on the market for awhile.
Great feedback from Kevin S. and Michael Skura, Juan. I don't see this as a great deal, particularly when you factor the risk of HOA (lack of control). It is just too skinny, without money for reserves, legal expenses, property management (take this out even if you plan to manage yourself), etc.. However, if you are looking at a home, it might be just fine.
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