First rental property deal! What do you think?

8 Replies

Soooooooo I've been browsing around for house hacking property in my area of Dallas and I've finally found one that I think I can make work, but I'm really new to this so I'm unsure about taking that leap of faith. Here's the estimated numbers so far...

6b/3b triplex
Built 1925
Don't know last renovation
Colonial revival style
Growing part of town
$110k total
$1,200/mo income (other 2 un @$600each)
$560/mo estimated mortgage
$123/mo taxes
Don't have a solid insurance quote
$240/mo (10% ea for vacancy and repairs)

After crunching that I came up with over $250 cash flow each month, and getting to live for no money each month, which is a huge incentive for me. And it's about 10-15minutes from downtown.

What do y'all think?

Thanks in advance, BP community! :)

-dan

I'd throw in a budget for a capital expenditure reserve on top of your maintenance fund. Big ticket items like furnaces, roof, driveway, AC, etc that can wipe out a maintenance fund in the blink of an eye. Aside from that, seems like you're on the right track. 

Originally posted by @Daniel Porter :

Soooooooo I've been browsing around for house hacking property in my area of Dallas and I've finally found one that I think I can make work, but I'm really new to this so I'm unsure about taking that leap of faith. Here's the estimated numbers so far...

6b/3b triplex
Built 1925
Don't know last renovation
Colonial revival style
Growing part of town
$110k total
$1,200/mo income (other 2 un @$600each)
$560/mo estimated mortgage
$123/mo taxes
Don't have a solid insurance quote
$240/mo (10% ea for vacancy and repairs)

After crunching that I came up with over $250 cash flow each month, and getting to live for no money each month, which is a huge incentive for me. And it's about 10-15minutes from downtown.

What do y'all think?

Thanks in advance, BP community! :)

-dan

 Hi Daniel, 

Give me a call, I'll walk you through all the numbers. I have a spreadsheet that will help you with the analysis.

@Daniel Porter

Looks like a good house hack.

Who takes care of trash?  Is that covered by your taxes?  If not, this will probably add ~$75/month to your expenses.

Are there common utilities that the landlord should pay?  This includes hallway, porch and basement lights.

I don't see a number for Sewer and Water.  You'll need to add that expense unless you are one of the lucky ones buying a separately metered house.

Here is my opinion on how you should put a number on Cap Ex. This is an amount of money almost as sacred as your security deposits.  Add to it and NEVER touch for anything except the big ticket items. 

Be sure to shop around on the insurance.  You will have a large range from company to company.  

Free or close to free is hard to beat!  Nice work!

@Daniel Porter

There will be many things that you will have to take into consideration if you buy this (your first?) property. But the numbers look good... DO IT!  Don't let this be the one that got away. 

That's awesome!

You are on a great start. Check who pays utilities, what large maintenance issues exist, and check the demographic on who you will be renting to. You will need to live there too so you want to make sure you are comfortable.

If it is a multiple rooms you could even rent out a room saving even more. Wiothout a lot more information it looks like a great first property.

Thanks for all the feedback everyone! I still haven't heard back from the realtor I contacted. I'll update with new info as I get it.

One question about repair estimates: will I eventually have to hire separate contractors to inspect all the separate potential problems (roof, foundation, electrical, plumbing, etc.)? Does that cost a lot of money, say more than $100 each? Is there a way to get free inspections?