Quote:
|
Originally Posted by bdjuf
Say there is a triplex $400,000
You buy it with 10% down, finance it for 25 years lets say
so you put $40,000 down and you have a $360,000 mortgage for 25 years
you rent it out, and you are pocketing 500$ every month after taxes and mortgage. With not much hope of great appreciation.
does that sound like a reasonable deal for getting your feet wet in the RE market?
|
you think you would have positive cash flow with 10% dp?
hmmmm.
ok, it might be a good investment, but:
1. check the area's political climate, if there is any chance of rent control you might have trouble.
2. check local vacancy figures, if they are under 2% you might have a chance.
3. check population migration data, you need a growing area with steady population increase.
4. check avail land and builder activity---scarcer buildable lots are better for you.
5. check demographics, is the area mostly white or asian, that is good for values---if blacks are migrating into the area this will lower values, if hispanics are moving into area this will flatten values.
6. check if current tenants have long term leases. you don't want that.
7. check if tenancies are seasonal. you want long-term mature tenants, not college kids.
8. check if the law allows you to rent to adults only (exclude kids), if so you will have greater ROI.
good luck.