Another suburban single family home rental property

[Greg Weik]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $469,000
Cash invested: $230,000

This is one we never really thought would be a rental. We purchased it back in 2012 as an owner-occupied house and made a lot of updates over the years. Rental rates in the area for single-family homes have skyrocketed due to a lack of supply, allowing us to rent this one in a single day for $4200/month.

What made you interested in investing in this type of deal?

Single-family homes are my specialty. Appreciation and stability are king.

How did you find this deal and how did you negotiate it?

Paid market pricing for it back in 2012.

How did you finance this deal?

Conventional

How did you add value to the deal?

We re-did most of the property just for our personal preference, but it ended up helping on the rental side and the appraisal side.
We could have rented it for close to the same amount without all the added extras. Cliff's notes on what we did - Renovated kitchen, renovated master bathroom, renovated garage, renovated basement, new paint, new roof, new slate floors, artificial turf front and back.

What was the outcome?

The property appraised for exactly $1,000,000 just a couple of weeks ago, thus appreciating over $500,000 in a 10-year timeframe. Now that it is a rental and a great cash flow property, we are excited to add it to the portfolio. For those interested primarily in cash flow, I would urge them to look at appreciation much more closely. If you can acquire single-family homes in the right areas, appreciation is typically excellent.

Lessons learned? Challenges?

Buying a single-family home in an established suburban neighborhood is, IMO, the best investment you can ever make. It's one we have repeated a number of times now. We only own 7 properties, but the wealth-building upside from buying the right single-family homes can't be overstated. The challenge is of course acquiring the right property in the right area, but if you know your numbers and if the homes will break even with rent, they tend to be great investments.