Rental property vs. Selling (after a year) in Alexandria, VA
I have started to look at properties in Alexandria, VA because I want to be closer to work. I was originally thinking of renting, but after listening to BP podcasts I thought it would be better to just buy a house and rehab it to get some experience in real estate and the rehab process.
My idea is to rehab it (doing a 203k) and live in it for a year or more and either turn it into a rental or do a 1031 (thinking that the rehab will increase the equity in the home). Because of the location, I feel that the area will grow and the pricing of houses will go up making my house more desirable. I saw a house that was listed at 0.5 million (although, it is not really comparable since it's bigger, i.e., a house 4b/3.5).
Looking at some estimated numbers it does not appear to be a good rental property.
Some of the numbers I looked at are as follows:
House: 2b/1b 816 sq. ft.; Lot 3650 sq. ft.
Asking price: $345K
Possible offer price: $250-300k
Rehab cost: $60k (estimated, not sure of any issues but looks as if it needs some work from the outside)
AVR: $412k+ (estimating based on realtor.com)
Rent: $1800 (not including utilities)
Annual Taxes: $4,734
Another thing is that the realtor said the buying process was complicated. I have not talked to her in detail about it yet, but it makes me a little suspicious.
My thought is that after rehabbing and living in the house for a year worst cast I can sell the house or do a 1031. Wanted to get some others opinions. Thanks!