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Updated about 9 years ago on . Most recent reply
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Which Choice would you choose?
Currently my wife and I are looking at 1 of 3 different options. We are setting up appointments soon to walk through after the first of the year.
First option I personally like, is a SFR close to our other 2 rentals that is sold by owner who seems to live out of town. It is currently rented until July. from outside doesn't look that bad. Roof probably in another 5-7 years, Air conditioner looks old so of course if it goes out will need to be replace because of the new refrigerant. Pictures looks good but as we all know looks can be deceiving. 2 brm on slab about 810 a month, they are asking 62k.
Second option, Found a duplex both rented out currently all brick and has garage off alley one for both unit. Looks like it has a 3rd stall for possible storage of maintenance equipment. It is on the high end of our budget with the 20% down. Probably could swing it but be tight with little cash available for any issues. 2brm each side 700 per unit, they are asking 120k
Third option, Wife personally likes. SFR Empty, all brick, new carpet move in ready 2 brm may need a couple new appliances, location good right next to a grade school. Pictures look good, we can be selective on new tenants, possible rental 850 asking 64k
My thought process is why do I want to work to find a tenant in middle of winter if others are rented. This is instant rent coming in, if there is any issue with a tenant breaking contract give them a notice, evict and move on.
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@Chris Sukala So it sounds like option three is by far the least lucrative deal. Listen, I'm married too...I fully understand the realities of "Happy Wife, Happy Life." But, I'm willing to bet your wife is a very smart woman (I mean, she married you after all, right?). Once you explain those profit margins to her, she probably won't like option three much anymore.
So, that leaves you with option 1 and 2. Option two looks like it needs a bit more Due Diligence. If you're going to hire out the mowing and plowing, you really need to get some quotes and factor that into your bottom line. It may eat away allot more of your profit than you think.
As for taxes, don't sweat that. Are you or your wife pretty savvy with taxes? Have you filed your own taxes in the past? My wife files ours online herself, despite having multiple properties on the books. She pays for the higher end tax software to ensure all our business expenses are accounted for but we've never taken a loss come April. We're a family of 5 with the kiddos ranging from 2 Y/O to almost 13 Y/O. I will give a word of caution though, if you're not comfortable doing your own taxes, don't hesitate to take them to a professional and pay the extra money they'll charge you to ensure they're done right. There are some things money CAN buy. Peace of mind is often one of them.