The Money Mustache Community
Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: Neustache on November 21, 2014, 11:42:35 AM
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I don't have the money for it, but just saw the 4-plex my husband and I first rented after we were married list on realtor.com.
All units are 2 bed/1.5 bath and the asking price is 104K.
12 years ago we rented at $475 a month, so it's possible rents would bring in....I don't know....24K a year?
I can't even evaluate this logically...some sentimental hormone in me says "I should buy it!"
Again...I don't have the money, and it's mostly sentiment talking. All the sentiment broke my brain and I can't even tell if this would be a good purchase for someone else. LOL.
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All units are 2 bed/1.5 bath and the asking price is 104K.
12 years ago we rented at $475 a month, so it's possible rents would bring in....I don't know....24K a year?
Price-to-rent ratio of 4.3. Paying all cash, 50% rule, $12k net income on an investment of $104k gives an 11% return. Yeah... sound good at first glance.
Coming from Los Angeles, deals like this make we want to barf. A unit bringing in $24k a year can easily go for more than $500k.
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Full disclosure: This is a suburb of KC and while I like the school district, it's not a sought after district in the area.
So whoever buys this would be dealing with lower income folks who aren't trying to move to Lee's Summit, or...people like my husband and I who have always lived in this area and like the low COL.
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I would love to take advantage of a deal like that, assuming it's not falling apart and rotted through and missing all the copper... a SFR around here is usually $500k+.