First investment property: Jackonville, NC. Need your input!

[Stan C.]

Hello all, 

This would be my first investment property and I need to be very careful about not making bad mistakes. I'm an our-of state guy out in NY. 

It's a duplex in Bell Fork / Hawkside area of Jacksonville, NC, 28540.  How is the area? Crime-wise? Vacancy rates? Income? Has anyone had any experience in this part of the town or Jacksonville in general? 

The property would have been managed by a local PM company.

Thanks!

[Ben H.]

With apologies to @Edward B., Camp Lejeune is the largest coastal Marine Corps installation in the world. 

I’ve self-managed after getting burned by a PM years ago. With so many rentals in this area and the barrier to entry so low you get a lot of less than competant PMs competing for the contract but their focus is not what’s best for you but what is best for them. Simple math tells yo why: with average PM costs being 10% your $700 rental means they are only getting $70/mo to look after your best interests. And then they have to do that at scale? Let’s say if they are full time PM to cover costs (mileage mostly) they need gross revenue of $50k, that means they need $500,000/mo in rentals to manage. If their average is $1k that’s 500 properties. That’s why most PMs do it as a side hustle or a real estate office does it on the side- with their end goal being to sell your house. 

As for Marines, they are no different as tenants than any other grouping of 18-24 y/o “adults”.  Only they are even better because they have a guaranteed j-o-b. Vast majority of the single types have to live on base so you won’t be dealing with that crowd. Those who do live off base are married which can lend some stability but at that rental level you are going to be dealing with lower-tier quality no matter where you invest. 

Duplexes in this area can be associated with Class-C or lower areas as there are a plethora of SFH available in the area at decent price points or prospective tenants will choose from the many nice apartment complexes that have been built in the area since I've been here.

That area you have selected is a Class-C area. Some SFH with stable residents there but a duplex is going to be a shorter-term lower-class tenant.

As for cost to turnover, depends. If the place hasn’t been updated in a while I would say at least 2-3x current rent to get it up. If all it needs is paint and cleaning, 1x rent is probably enough. 

Don’t get me wrong, this may be a great investment. Duplexes are often touted as easy money- but all real estate is local. 

Hope that helps.