I found a great house; move in ready. Just needs some paint and minor landscaping. It is in an amazing area where I know I could get a renter quickly in this area. But there is an active railroad tracks right next to the property. I have no clue how this will affect the house value, rental value, etc. Any help will be great.
Would you want to live next to railroad tracks?
Major external obsolescence.
It will lower the sale and rental value especially for a sale, that is most likely why it is priced lower than market now because most people don't want to live right next to the railroad tracks.
If you're getting a big enough discount on the house to where you're going to be all in for little to no money, then do it. But figure that you're going to have to discount the rent a couple hundred bucks to get a renter to be willing to get past the tracks.
I have a house that is two doors down from the tracks. And the one house/business next to the tracks is literally a gun shop. I got 1250/mo rent for that when the market rent was probably 1350. Great tenants too. Older couple that pays like clockwork. It doesn't bother them a bit.
Bought it for 63k. Put in 25k in rehab. Appraised out for 130k. Rents for 1250. PITI is 800/mo. Gross profit 450, net about 200/mo or so. I'll take that all day long with little to no money out of pocket.
You'll find a renter for it. Just a matter of discounting it a 100 to 200 off market. I do the same with houses that have no garages. I have 2 that don't have garages. I discount the rent 100 a month or so and have them rented just as fast.
@Antoine Martel I personally wouldn’t but after asking several people at work, about half said they would and it wouldn’t bother them. If it was in an area that wasn’t very good, I would steer clear, but it is in a market with plenty of renters and not enough property.
@Mike H I was planning and knocking off $200 for rent. Rentometer says average is 1500 and after talking to two coworkers who rent 3/2 in the same area, that seems to be about right, so I was planning on renting for 1300. I just wasn’t sure exactly how much I should take off of rent when I am doing my initial analysis and running the numbers.
Comps are between 1200 and 1300. I can cashflow if I get the price right for the house (115,00 is the highest I will go and they have it listed at 145,000). It is i a great school district and is in downtown. My biggest worry was getting residents, but judging by comments, that shouldn’t be an issue as long as it is listed right.
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