Good deal or bad deal for 1st time rental property?

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Hello. This is a rental property. The seller only negotiated $5k down their original price. By looking at the numbers, do you think it is worth the investment? I appreciate your feedback.

*This link comes directly from our calculators, based on information input by the member who posted.

Originally posted by @Dolly La Salle:

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Hello. This is a rental property. The seller only negotiated $5k down their original price. By looking at the numbers, do you think it is worth the investment? I appreciate your feedback.

*This link comes directly from our calculators, based on information input by the member who posted.

@Kathryn Schauer Thank you, Kathryn, for your response. This is a townhouse with no HOA nor CDD fee.

 

@Dolly La Salle : who maintains the yard areas?  What are the monthly utilities?  Who is leasing the property, and are they charging a leasing commission?

Beyond that, it is impossible to tell the actual age and condition of the various systems.  But, assuming those are shared walls, I would be concerned about how well your neighbors maintain their stucco and roofs.  Their issues can quickly become yours if they aren't able to fix a roof leak that is coming into your property.

I would not be a buyer, personally, because the numbers are too tight, both in reserves and free cash flow.  But if everything is brand new (including neighbors roofs and trim), I might feel a little different.

@Evan Polaski Thank you for your feedback. You're right about the yard. I started adding lawn maintenance into my calculations. I see that you can't always depend on the renters to keep up the yard work. After analysis and feedback, I decided not to purchase this property. There was not going to be much cash flow. I appreciate your time and feedback!