Investing in a 3500sqft single-family home for rental income?

[Prashant Chawla]

I have a home next door that is going on sale in a safe suburb of Columbus, Ohio. Prices in my neighborhood are roughly around 450,000 to 500,000 range, single-family, approx 3500-4000 sqft homes.

Pros:

1. Its next door, I know the owner for 6 years, very well kept home, the property is in front of my eyes if I rent someone. HOA doesn't have strict guidelines to not rent.

2. I can manage the property without a doubt because its literally like I am living there, proximity from my residence. It's across from my property.

3. Real-Estate is generally a safer investment compared to Stocks or any other "Virtual" asset with the market being so unstable. My current financial condition is decent to afford 2 mortgages. Interest rates are low.

4. If it doesn't rent, my parents are getting old if they do want to move next to me, if I have this house they could stay closer.

Cons:

1. What are the chances it can get rented? I have only seen 2-3 homes being rented in my neighborhood.

2. It's a large investment for potential rental as a single-family.

3. Real-Estate market prices could drop next year, a post-election year with COVID-19 still not gone. The overall market is unstable.

4. House is 7 years old instead of brand new. That means large maintenance items like Furnace have limited life if they weren't replaced yet.

[Chris John]

@Prashant Chawla

I'm anything but an expert and don't know anything about Columbus, but I'm not sure I'd purchase this particular home as an investment unless there was a part of me that just really wanted to own it.  For it's price and size, I'm guessing you can find properties that would end up being more financially lucrative.  Having said that, we only live once and if you really want it, it'll probably make some money in the end.  It seems like everyone ends up making money in the end (as long as they can hold onto it through the tough times...)

Good luck!