Is this a good investment?

Question

I'm considering a 4 unit property. It is 2 duplexes with attached garages. The property is in great condition in a desirable area. Purchase price is 300K. Gross income should be around 36k per year. Taxes are 9k and insurance is $2400. Thoughts?

Eliott Elias · Answer

Perfect 1% rule. See what you can get with Airbnb

Sara Levy-Lambert · Answer

It sounds like you're considering purchasing a four-unit property in a desirable area for a total purchase price of $300,000. Based on the information you provided, the gross income from the property should be around $36,000 per year, and the property's taxes and insurance will cost a total of $11,400 per year.

One thing to consider when evaluating the potential profitability of a property like this is the expenses associated with managing and maintaining the property. These can include things like repairs and maintenance, utilities, and any other costs associated with keeping the property in good condition. You may want to consider these expenses and how they will impact the property's profitability before making a decision.

Another important factor to consider is the potential return on investment (ROI) for the property. To calculate the ROI, you would divide the property's net income (gross income minus expenses) by the total amount of money you have invested in the property (purchase price plus any renovation costs). This will give you a percentage that indicates the property's potential return on your investment.

It's also worth mentioning that the gross income and expenses you provided are just estimates, and the actual numbers may be different once you own the property. It's important to do your own due diligence and carefully evaluate the property's potential profitability before making a decision to purchase.google awning airbnb estimator and see what the projections are there as well, as well as nearby properties

Bob S. · Answer

As mentioned, you can get a 4 unit for about 170k with about 24k net. Not sure where your building is but there are better options in other markets

Good luck

Bob S. · Answer

About 20k net on 300k, ( about 7% net cap) not good. You can get a 4 unit for all in about 175k in other markets with about same gross and higher net in other markets

All the best

Scott Schlueter · Answer

What would you do with 150K sitting in the bank? What kind of numbers would you like to see on a 300k investment?

Scott Schlueter · Answer

I have about 150K to put down which will help the cash flow. Can you explain the 1% rule?

Jack Mawer · Answer

Cash flow may be tight especially with today's rates - I agree with Eliott to compare what cash flow would look like as an STR through Airdna or similar platforms

Is this a good investment?

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