Advice on a single family buy and hold

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Advice on a single family buy and hold

Sanjeev Ayyar
Investor · Sugar Land, TX · Member since 2013 · 8 posts · 3 votes

I’m looking at a single family house for $210k.

Rent is $1500 (we have rentals next to it that rent for this amount)

Prop mgmnt: $150

Mortgage, prop tax, insurance: $1275

Basically breaks even. Prop mgr will take 1/2 month rent for finding a tenant.

Return: basically the debt pay down about $1800. Down payment and associated buying costs: $55,000.

About: 3.3 percent. Appreciation has been 50 percent total over the last 12 years (not much)

Pro: prime area and always rented. Trust the prop Mgr. I have had rentals in this neighborhood for 12 years.

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  • Steven McLarty
    Rental Property Investor · OK · Member since 2019 · 29 posts · 4 votes
    7y

    The numbers are not attractive to me.  How large is the house and how many bedrooms.  For a $210K home that rents for $1,500, I would look elsewhere or raise the rent. 

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  • Bryan L.Pro Member
    Rental Property Investor · Brewer, ME · Member since 2016 · 45 posts · 20 votes
    7y

    Even with the tenants paying all utilities I can't see how this would break even...you're one capex away from a big loser.  I'd look for something else unless you can buy at a better price or increase rent.

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  • Matthew Irish-JonesBusiness Member
    Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
    7y

    @Sanjeev Ayyar break even is not usually a good enough number for me to consider.  You will have expenses, minor ones that add up and major ones that add up really fast.

    I had a lovely experience last spring finding out that my water main was detached.  That was a large expense.  When they dug up my driveway and the sidewalk they discovered that they sewer line had also detached.

    That may be a rare expense but... hot water tank, furnace, roof, windows, electrical, plumbing (always plumbing issues), will all come up, and more frequently than you think. 

    Irish Jones Realty4.947 Reviews
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  • Kenneth GarrettPro Member
    Investor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes
    7y

    @Sanjeev Ayyar

    I would walk away.  If the property doesn’t cash flow it’s not a good investment.  This is the challenge with the current state of the market.  Prices are high (over inflated) for certain strategies.  I believe in today’s market on a sfh it must cash flow $300+.  

    Good Luck.

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  • Sanjeev Ayyar
    OP
    Investor · Sugar Land, TX · Member since 2013 · 8 posts · 3 votes
    7y

    @Steven McLarty. Thanks. I’m going to stay away.

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  • Sanjeev Ayyar
    OP
    Investor · Sugar Land, TX · Member since 2013 · 8 posts · 3 votes
    7y

    Thanks all. I’m going to stay away. Prices have gone up in this area, but rents have not.

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