Is this a deal?

8 Replies

The property is a duplex each unit is 1 bed 1 bath, was recently renovated. Both units are recently rented at $395/month.  Sounds like turnkey but nothing about it being rented or cash flow in the listing.  Its listed for 25k.  Taxes are $417/year.  And buyer willing to pay 2k towards closing.  What other information do I need to analyze this deal.  

Tenants who pay $395 per month and homes in the $25k range are not in the best areas.  Its usually low income, higher crime, vandalism, etc.....  

Im not saying you cant accidentally get good tenants but I feel long term it wont be the best deal.  If your expectations are low going in and you know the area and risk then go for it.

Does the $395 include any utilities?  What is the average tenancy in this area?  What do other properties on the block look like?  If it is long distance, can you find a quality PM?

Rather than analyzing this particular deal (although it is good practice), think you may want to step back and ask yourself if you want to be a low income landlord.  It's not for everyone, it is a tougher niche.  There are several forum threads and some podcasts on this topic.