4 Bed, 2 Bath, very small back yard -yard's impact on rental viability

[Kevin C.]

Looked at a home in a very nice area where DOM for rentals averages 8 days. Home is a 4 Bed, 2 Bath, with a game room up, 2,265 sqr ft.

Home is 2nd house over from a pretty major street. Walking distance to excellent elementary school, you do not have to cross the major street to get to the school. Walking distance to excellent park, you do have to cross the major street to get to the park.

Home is a REO, would need some flooring and paint, nothing major to get it rent ready.

Area is geared to young families. Since the home is 4 bedroom, it would appeal to a family that has several kids. I looked up every recent rental, and all of them have larger back yards than this one.

This home has two negatives, close to a busy road (not a highway, but a 4 lane road), and has a very small back yard. Home has a small covered stone patio, maybe 10x10, and a very small area with some small bushes, that's about it - very little open area.

Most homes in the subdivision have larger yards, not huge by any means, but enough room for kids to play.

Home was built in 2000, ask is 149.9K, down from 159K. Yard is my biggest concern, proximity to major road second concern. Resale is always a concern, but not a major concern since I'm buy and hold and rents in this area are very strong.

Comparable rents are showing to be in the 1,400 to 1,600 range, proximity to major road and small back yard could knock that down - question is, by how much?

Anyone have experience with rentals such as this, geared towards families but tiny back yard and close to major road? If so, how has it impacted the ability to attract tenants?

If I can get over the back yard and road issues, I'd probably offer 135K and see what happens.

At 135K, 50% rule shows it losing $19 a month. I'd be managing it myself, so adding the management fee back in would put the cash flow in the $130 a month range.

Would like to hear opinions from those who have similar rentals.