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Updated almost 9 years ago on . Most recent reply

User Stats

6
Posts
1
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Ben Larson
  • Cottage Grove, WI
1
Votes |
6
Posts

Rent Amounts Way Below Market on Duplex I am considering buying

Ben Larson
  • Cottage Grove, WI
Posted

I am strongly considering a duplex to owner occupy for my first investment property.  It checks all boxes in terms of quality, space, schools and neighborhood. My concern is that the rent amounts from the current tenants are really low and don't make sense with compatible properties found on Craig's List and Zillow.  Both sides are 4 bedroom, 3 bath  currently renting for $1440/month. The three properties that compare are listed for $1850 and $2095/month.  I don't know much about how long the tenants have been renting although they are both on a month-to-month lease which I also find strange.  The property is in really good shape and well taken care of.   As I mentioned before it is in a very good neighborhood and very close to a good school.  It is only 10 years old.  It has been on the market for a little over 2 months and had one price reduction on the listing of 10K in Mid-April, also factors I find curious.  I have run the numbers and if I get market-value rent it will cash flow very nicely.  My plan is to buy the property, move into one side and raise the rent to market value (plus a 1-year lease) on the other side, either with the current tenants or by finding new ones.  Because I am new I feel like I might be missing something which scares me.  If rents are below market value with current tenants and a property has been on the market longer than you think it should be in today's environment, what does that mean?  What would you do to make sure you are purchasing the right property?  Please let me know your thoughts.  Thanks!

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