SFH. >50 years old; Renovated in 2006. 4BR/2BA 1300 sq ft each. Area = B class (walking distance to a private university; tenants will most likely be college students)
Taxes = $200/mo
Insurance = $125/mo
Maintenance = $100/mo
Vacancy Loss at 5% = $75/mo (Asked owner to see previous leases and home has not had any vacancies for the last 3 years, but is currently vacant; lease ended 7/1)
TOTAL EXPENSES: $500/mo
Principal and interest = between $400-$450 (depending on final purchase price; Pre-approved 20% down, 4.5% interest rate for 30 yrs)
Closing Costs: $3,000
Estimated Repairs: $0 (move-in ready).
What's your max offer? What do you think of this deal? Thanks in advance.
1. Certainly area comps should be considered and used to evaluate an offer.
2. $1200 sounds low for four (4) college students, In my town it is $675/month which includes all utilities and wifi. (675*4-=2700, less $125 electric, 80 gas, 80 wifi, 50 water, 30 sewer, 30 garbage=$2300/month net rent.
3. Range of offer $110,000 to $120,000 based on your rent estimate but higher if you charge by student ( joint and severable lease)
Thanks for the feedback. Yea, it's a pretty small town so $400 is really the max you can get per student. (Just for context: The average income in this town is $40K and an average 2bd/1ba rents for about $600 with 3bd/2ba bringing in closer to $1000) I did make an offer of $105K but they ended up accepting a cash offer of $102,500.
Back on the hunt!