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This is an older house in Little Rock, AR. I don't expect it to really appreciate unless I force appreciate it. I am looking to purchase my first property and I would like any input you could offer. I averaged in 10k for a new roof, paint and drywall repair on one wall, and possibly new floors. I think I may need to bump the repair up by 3-5k though. Let me know what you think.
@Adam Mittermeier - Disclaimer - I do not have a rental property, but I'm currently looking in Little Rock, AR too. Do you think you will get a renter in this area? If you do, will this be a "good" renter? I'm very familiar with this area. Be careful.
I recommend that you check the Trulia crime map before purchasing.
@Aaron Wade and @Mark Rogers I am aware of the crime rate in that area. I am doing my homework and running a lot of numbers on particular houses in different areas of central Arkansas. I see that these properties are very cheap, and for good reason.
Since I am a new investor (haven't purchased my first investment yet) I wanted to see what people would say about this area, especially as what some local investors thought. There is definitely money to be made in those areas, but could be difficult finding good tenants. Thank you for your help on this analysis.
How many bedrooms? The rent seems a bit high for the area.
I probably would just do the roof and let the renters paint if they want to in that area. I don't know that it's a good business model to have the nicest house in a not great neighborhood.
@Rachel Fazio it is 3 bedrooms, 1 bath. I used rentometer to check average rent....I was kinda thinking that could be a little high as well. What your saying makes absolute sense though. I don't want to make it a nice house in a terrible neighborhood.
I know what's going on with Rentometer...in that neighborhood it pulls from some gentrified areas and some not. You can get a $1200 coach house a street over from a drug den. I think for a decent 3/1 in that neighborhood, you could get maybe $700-$750. You never know, maybe higher, but I'd re-run with a more conservative rent just to be safe. You can always hold out for that rent, but then you'll need to increase your vacancy estimate :)
@Rachel Fazio I believe your right, I kinda figured that was high. So in areas like this can they still be hands off if I hire property management to take care of that?
Shoo, yeah. You saw my duplex. I manage that and it's still like 95% hands-off :) Pick good tenants, get the house inspected. That will take care of the vast majority of your problems, just to know what you're getting into on both those fronts.