I'd like to buy a place in my home town and live there until remote work ends or I want to move on. I'd fix it up a bit while there. After I move I'd like to rent it out. The problem is the numbers just don't seem to make sense. Asking price is 319k and I might be able to get $2200 a month.
Mmaybe it's a bad time to buy or the maybe this is a bad deal but I've got a broader question. Is the 2% rule for rental properties applicable for SFH in California? Surveying the state and some historical data I haven't found much that seems to fit the rough guidlelines I've encountered here.
Thanks so much for your time and all the best. Happy Thanksgiving.
Rental Property Investor · Chico, CA · Member since 2016 · 625 posts · 336 votes
5y
@Harry M. Winters Welcome! %2 is very rare in California. It exists but tougher to find or create. The deal you are talking about isn't too bad if you get an owner occupy loan at say %3 interest or lower.. The cash flow will not be great but if you fix up then I would assume the value will rise giving you equity. Then when you move on the property will be paid down by tenants over time and you acquired this asset for 0 to 9k which is pretty darn good in CA. All depends on your situation and where the town is etc. Say payment is $1600 approx which includes principal, taxes and insurance. and can rent for even $2000 per month that is ok. You will have repairs etc but you stated you would improve the property so repairs should be minimal. If you are young enough this can be paid off over 30 years bu=y other people.Good luck and keep us posted.
Thanks @Dylan Vargas! Super helpful reply. If this is the culture of Deeper Pockets forums I'm hooked.
Your thoughts mirror my own. I think it at best it might be cashflow neutral sliding into slightly positive over time. The tax benefits might make it worth it and of course there's appreciation and equity growth but I would be sad it it turned into a giant money sink.