Would this be a good buy?

Question

I am looking to buy this house from another landlord because I see the potential and it's in a great area, but it is also dated inside. However, it's already rented out by a long-term tenant who doesn't plan to leave.

Purchase Price: $57kARV: $105kMarket Rent: $950Current tenant who has lived there at least 25 years: $700 (I plan to raise her rent like $75/year to get closer to market rent)Repairs at time of purchase: $0 (because no repairs have been reported since tenant loves her own mess)If tenant leaves, that's when I need to think about the rehab because:1) some of the walls have the dated wood kind of look2) old, dated kitchen cabinets3) fully carpeted house will need it replaced4) re-paint inside5) 150 amps service (should I upgrade?)6) AC is system is dated 20067) Roof probably about 10 years old8) Plumbing is galvanized pipes

Some will argue that many of these things don't need to be replaced because "if it ain't broke, don't fix it". Only the paint/carpet would be "needed" for a new tenant move-in along with touching up the kitchen cabinets. Once it's cleaned up, I should still be able to get $900 for it even though dated-looking.

What do you think?

Patrick Liska · Answer

Robert, use the tools on the site to run your numbers and to make sure that the rent will cover all your expenses. 150 amps is more than enough for a SFH, i wouldn't change that and the roof, if its a 3 tab shingle, you have another 10 years at least, the pipes i would be Leary about, but like you said, if its not broken don't fix it, that can run you some money, especially if all the pipes are in the slab. the reason they have been there for 25 years is because of the rent, i would raise it but keep it a little lower than area rents, always good to have a long term renter.

Would this be a good buy?

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