Is this a good deal (Hanford, CA)

[Natasha Bee]

I am looking for my first SFR and my strategy is buy & hold for retirement. I am looking in Hanford, CA where average monthly rents are $1100-1200. However, I felt that the best cash flow actually came from a new construction that is $231K that can earn about $1525/mo rent based on neighboring rents (my PITI would be $1207 with a 20% down 4.375% 30 yr loan). I wasn't initially looking for this tenant pool (higher end), but what is attractive to me is a brand new home that would likely not need much for repairs. In addition to being brand new, which I hope would attract some tenants, it has solar panels. I used to think that $1525 rent - $1207 PITI - $60 yard maintenance = $283 cash flow, but after browsing this site I see that I have left out vacancy and maintenance (will self-manage). If I add those, then ($1525 rent)(5% vacancy)(5% maintenance) - $1207 PITI - $60 yard maintenance = $109 cash flow. This number may seem low to most, but here in CA I don't know if I can find much better. I am torn because I'm worried about the tenant pool being small, but attracted by the minimal maintenance of a new construction. Any thoughts...especially if you know the California Central Valley area? I know the cash flow is better in other states, but I am scared to invest too far away.

[Elizabeth Colegrove]

Natasha I would run! You do not want to be located next to the train tracks for the price! I know of quiet a few better houses that will get 1600. Backyard are "very" important in this demographic! Shiny is not good because that really doesn't do you a lot of good with renters and if your "core" things aren't going for you!