What am I missing? Buying my first rental property.

Question

I have found what I think is a pretty good property. It's in the suburbs - two buildings (next to each other) with 4 rentals in total.

Long-term tenants with total rent = $3050/month 
	Asking Price: $272,000 (I can definitely get it down to $246,000)
	Taxes: $2300/year

Location: The city is OK. Not very good but ok. But the town next to it is very good. Mostly doctors and lawyers. This property is 100 feet from this town. And the property is surrounded by decent properties.

Tenants: Not a problem. Very easy. Lots to choose from.

Appreciation: Probably very little (property has been on the market almost 3 months)

What things should I be concerned with? it's 6.7x the rent roll. Which compared to NYC is very attractive for me.

I'll check the boiler, roof, making sure current tenants are paying on time,...

what are your thoughts? what else should I be looking for?

Ed O. · Answer

Depending on your experience a building inspection might make sense. Even if you have a decent background in construction, a good inspector can advise you of age and region specific issues you may need to keep an eye on.

An inspector could also help you avoid a catastrophe.

Good luck.

Ali Boone · Answer

What are the actual numbers? Expenses -----> Cap rate, cash-on-cash....

Jason Eyerly · Answer

Steve,

My knowledge of properties in NYC is very limited, but with what I do know and have observed personally (I used to tag along with my Uncle - he's a construction contractor) on buildings with age like you have throughout New York, it is very important to check for leaks, as well as foundational issues. Additional things to consider are things like led pipes and broilers. My Uncle had always said these are the most costly things he notices the most often.

Best of luck! Keep us updated.

-Jason E.

Steve Candor · Answer

Jason,

it seems reasonable. There are better deals but in worse neighborhoods. This area is decent.

I do not know their motivation for selling. They are selling 4 properties right now. One of them is in contract for $140k.

I have not gone through the property and can not until February. Anything major I should be concerned with?

Jason Eyerly · Answer

Does the price seem to good to be true? Do you know there motivation for selling, and have you gone through with a building inspector yet? These are some things I'd consider if looking at the property as described.