Newcomer seeking real estate investment advice on possible deal

[Nora Chandler]

My husband and I have been considering purchasing a small rental property for additional income.  We have found a very small, but in relatively good shape, property for $35,000. It has been for sale for approximately six months, by owner.  We have negotiated a price of $33,000 on the property, which is currently rented for $550.00 per month.  The seller has been very forthcoming in telling us that he does not know what the tenant's future plans are, as they are currently expecting a child and the residence may be too small for them.  However, the seller tells us the property has never sat empty for more than a couple of weeks. The tenant pays all utilities. The property taxes are about $450.00 per year.  We would be taking money out of our savings to purchase the house, which would not leave us penniless but it would take a substantial part of our savings....... but we would not have a mortgage payment on the property.  Right now, the money in savings, of course, is earning us nothing. After reading on some different websites,  I have estimated the cap rate would be around 10%. Is that a  decent return? Also, the seller does not want to pay for a termite inspection and I am not sure I want to carry that expense. ....would not doing so be a poor decision?  Also, the property is very close to my husband's employment and he is very good with repairs, so he would be doing most of the maintenance. And I have not priced home insurance as of yet.  Any advice or anything I am overlooking?  Any suggestions would be greatly appreciated!!