Brand new single family home for Rental (Houston) GOOD or BAD?

[Dante Peduzzi]

Hello, BP folks - long time listener, first time poster. Looking for my first (buy & hold) rental investment - considering a brand new home as a potential rental investment. What is yall's opinion if this is a solid investment or if I should skip and proceed elsewhere?  This would fall under way more than a turnkey investment as the builder is high quality and maintenance would be minimal for 5-10+ years, so I like the "easy button" aspect of this option.

I like the long-term equity play on this, but there is obviously a very low cashflow, so curious what others more experienced folks here suggest I should think about on this decision...???

Purchase price is $440,000 with potential monthly rental income of $3,000. More details in the attachments below. 

Thank you for your help!!

[Mark Brown]

Ok - the idea of buying a brand new home because everything is under warranty is a good idea, but I would recommend looking at starter homes. The number of people looking to rent a home at $3,000 per month is pretty small - people with that kind of income are more likely to be buying a house, not renting. What this means is that your house will likely sit empty for months while you look for a renter.  90+ days of vacancy - which brings us to the problem with your cash flow analysis.  You're assuming in your numbers this place will stay occupied for 12 months straight.  Of course, that's not realistic.  You should factor in long vacancies and then ask if you're willing to fork over all that cash to pay the note while it just sits there empty.  I wouldn't. I'd consider getting a starter home in a community with a good school district.  Shoot for $250 or less.