I am looking to buy my first rental property and would appreciate any advice or opinions on this potential deal. The house sits on 1 acre and is a 3 bed/1 bath in a quiet and safe neighborhood just outside my hometown. Owner said it stays rented and that he got $450/month. The interior looks a bit outdated so I’d like to do a few minor cosmetic repairs. Flooring, bathroom, paint, etc. I figure after a face lift I could potentially rent for $500-550. I’ll leave some pictures below and would love to hear what you guys think. Any questions, feel free to ask! Thanks
Asking price: $30,000
Past Rent: $450
@Kolby Wright this is a super low price point, where is the property located, most things in this price range tend to need quite a bit of work.
@Aaron K. It’s located in rural Oklahoma near my small hometown. The house is older, I am trying to upload a picture so you can get more of an idea!
Do you know how old the roof is? If it needs replacement that could be a big chunk of change.
Hey @Kolby Wright ,
I would be cautious about this house. If you can get an inspection that will help. It looks like an older house so here are a few things that you'll need to make sure are in working order. Roof (it looks like it's in rough shape), Plumbing, electrical, foundation, septic/well *if it's rural you'll want to find out if it's on city water and/or sewer or if it's well/septic.
It could be a good purchase. But I would just make sure you proceed with caution and know what you are getting yourself into. These little old houses can be full of surprises and not all of them are good. Make sure you get an inspection before you move forward.
@Kolby Wright What makes you think you can rent it for $500-550? Just because you are willing to make cosmetic repairs it doesn't mean the market supports that kind of rent in the area - what does the Lease CMA telling you? Vacancy rate?
Owner says, but does he have a tenant in place paying currently $450? Did he show you any executed lease contracts, regular deposits or something proving the $450 rent history?
Regardless, if you can get it with 30K and rents for 450+, that sounds like a good deal to me. Just make sure the state of the house - the roof, WH, HVAC, etc. on a 30K costs as much as on a 100K house and $450 rent doesn't cover much of these repairs.
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing