The Money Mustache Community
Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: atribecalledquest on March 26, 2013, 10:05:57 AM
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To directly answer: I'd be looking in the range of the gross rents monthly being 2% of the purchase price (i.e. it should still be a good rental under the assumption you don't live in one of the units. Then moving into one of them is fine.)
This type of question leaves so much to be desired though. There is a lot of individualized analysis that needs to happen. Location, quality of tenants, cap rates in that particular area, quality of building, current occupancy, etc. etc. etc.
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Kinda seems like you've answered your own question. If covering the mortgage with rent is your goal then you've got something to shoot for. Planning to live in one half of the property changes the equation completely. When I look at properties the big issue for me is making the cash flow 'worth it'. I'm not as worried about what the initial investment is because I'm planning to hold the property for a long term (20+ years). A duplex that provides $150.00/mo after expenses is not worth the time. One that gives $600/mo is worth it. If you've found one that satisfies your basic idea then you can start looking at the other issues of location, upkeep, etc.
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"Live free" is a good goal. You may have to buy a triplex or fourplex to make that happen. And buying in a neighborhood with walking amenities, preferably as close as possible to a university, is a very good idea.