First property - do the numbers make sense

[Becki Noel]

[Keith Schulz]

Hi Becki,

I live in Verona (just southwest of Madison). I would question if you could really get $1250 for rent in Randolph. The population there has actually declined over the last 10 years, so I'm not sure the rental demand is that strong. I have no doubt as you get closer to Madison (or Sun Prairie on that side of town) rental demand is extremely strong and vacancy rates are low, but Randoph is 40 minutes out from Sun Prairie. 

I'll give you an example of rents, appreciation, and demand in the area. I own a duplex in Arena (similar to Randolph about 40 min west of Madison, but Arena has experienced some growth), and I own a duplex in Verona. The rents in the Arena property were $835 back in 2000 (property built in 1997), and the rents now are $1010 (1.2 times 18 years ago). The property in Verona is much smaller and older. In 2000 it was rented for around $625 now it rents for $1040. (almost 1.7 times 18 years ago). The property value in Arena has gone up maybe 20%, where the Verona property has about doubled. The only reason I keep the Arena property is its one of the nicest rentals in town and it's fairly new. So, it's pretty headache and maintenance free. 

All this to say, you might want to consider the location a bit more for a long term investment rather than just looking for a cheap house. I'm not saying don't do it, I'm just saying make sure you consider all factors and if your numbers long term are realistic. 

Hope that helps.