$300,000 new construction as a rental??

[Matt Boschert]

I am moving to Montgomery AL to attend a one year school and then will be moving and most likely will never return. That said, I am thinking bout building a nice home or buying one that's still very modern (2500 sq/ft min) and will rent to students (similar to me) that will be attending school with the Air Force in future years. So the clientele is upper/middle with around 1800-2000 in housing allowance each month. My question is this---I won't have much cash flow and planned on financing the whole thing---this is my opportunity to get into the market when the interest rates are still fairly low and take advantage of the tax breaks. I plan on keeping this for 10-15 years. This is not a typical scenario as I'm going after a specify market....students that turn over every year. Happy to get some feedback....please be specific....I am new to this and won't be in the area after my school is over so I'll probably get a property manager.

[Tyrus Shivers]

@Matt Boschert

A new construction is not 300K if so then the builder is over pricing you. A nice 5 beds (two masters) with upgrades at around 3500sq in Pike Rd which is technically Montgomery goes for around 250 or less. The prices are raising however. So 2500sq should run you significantly less. Unless you are buying in a very high cost area, which are usually the older homes in Old Cloverdale area. Old Money.

I would not do a new construction for rental purposes. You could easily purchase a duplex or quad around Gunter or Maxwell for rental purposes. It is easier to turn over a duplex each year catering to students than a single family home. I feel your money would be siphoned slowly in a new constuction.