A deal in Portugal (Algarve)

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A deal in Portugal (Algarve)

Juan Correia
Rental Property Investor · Portugal · Member since 2018 · 61 posts · 26 votes

I have an opportunity to buy a house (single family, 3 bedroom, 3 bathroom) house.

The location is great, however, i think it needs a lot of work.

Crunching the numbers:

Asking Price: 300.000K

Rehab - estimated cost: 90.000K

Estimated ARV - 430.000 K

Some photos for your analysis:

Closing costs: 15.000 K

Estimated rental value after repairs: 25.000K per year.

What do you guys think?

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  • Tim Herman
    Member since 2018 · 2k+ posts · 1k+ votes
    6y

    @Juan Correia given the limited numbers, it looks like a dog. 25k income on a 400k purchase and remodel. 25/400= 6.25% return on equity. If that is gross rents your numbers are worse. Using the 50% rule of half goes to expenses and half to profit. 12.5/400=3.1% return on equity. Long term the stock market gives almost 8% with no tenant headaches.

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