Investor · Fond Du Lac, WI · Member since 2016 · 12 posts · 2 votes
Going to live in this side-by-side duplex. Looking to find other investors close to me.
The other unit is a 4 bedroom, 1658 sq ft - currently rented for $650 a month. There aren't a lot of comps that are similar. What's a good way to see if this price is too low? What are your thoughts on raising rent on "good" tenants.
Also, this will cover the mortgage, but not taxes and insurance. Still a good deal? Or should rent cover all expenses to be Positive income?
Flipper/Rehabber · Oshkosh, WI · Member since 2016 · 107 posts · 49 votes
10y
If your house hacking (living in one side) then rent may only cover part of the expenses. But I would analyze the entire deal for when you move out to see if it will even cash flow then. I would not buy if it is not a positive cash flow when fully rented
Rental Property Investor · Fond Du Lac, WI · Member since 2016 · 215 posts · 136 votes
10y
Agreed with frank, that 4 bed should be 750 on the low side, to 900 on high side, depending on location/ unit finishes / type of tenant. I do not have much experience getting tenants with the transaction as most of my purchases are REO. But you can walk a fine line with the rent increases, Maybe do a staggered system. Minor increase now, then a bigger one in 6 months. This gives you immediate cash and less risk and time to search for a new tenant if this one decides to leave.
As for cash flow, Most the principals and cash flow analysis that is spread thru this forum can be very low and misleading. I have a very strict cash flow analysis that is very short on my amortization schedule with a very high cash flow. Everyone needs to create a system that works with THEIR risk tolerance, not someone elses.
Lmk if I can be further help, I have a few units in the area :)
Investor · Fond Du Lac, WI · Member since 2016 · 12 posts · 2 votes
9y
@Joe Grebe: What you read is what I know. Currently, I left the rent and starting doing renovations on the garage, and my side. The tenants pay-on-time, are clean, quiet, and never complain. So I'm taking that as a trade off right now to do what I need to - knowing I have good tenants and money coming in every month. I will be raising it eventually. Right now, it's a good deal for me.
As far as I know- 650 is very cheap for a clean 4 bedroom.