Possible deal

[Juan Rodriguez]

Ok so I found a place that I'm thinking about jumping into. This is a town house that I plan to live in for a year then turn into a rental. Price: 90,000 3bed 2bath 1156sqft B- area 240montyly HOA a bit high for the area This size unit rents in this area for easily 950 maybe 1000 -1100 rent if updated a bit my mortgage plus Hoa would be about 750 Any feedback would be great thank you!

[Michael S.]

Hi Juan,

It's ok, but I think you can do better in the valley. The mortgage plus the HOA plus random expenses would make it cash flow negative or break even each year. The Phoenix area is a hybrid market providing rental income and appreciation. The appreciation has been great the past few years but I consider it a bonus and consider the rental income a better indicator of whether to buy or not.

Personally I focus on SFR Single Family Residence. It is easier to find tenants for the SFRs and you will receive a premium for the yard and privacy vs a town house or condo. The SFRs also seem to appreciate at a better rate, while condos tend to be the last to appreciate and the first to decline in a bad market. I try to buy 4 homes a year in the valley. In this market you need to be fast with your offer (24 hours of a deal coming to market) or very slow. :) What I mean by very slow is making low offers on homes that have been on the market for awhile.

Good luck.