Rental Property Investor · Saint Louis, MO · Member since 2016 · 16 posts · 5 votes
Hi there,
We are looking at an investment property in the town where our daughter will be attending college in the fall. This will be our first deal. It's a single family, 3 bed, 2 bath, 2 car garage, small fenced yard, no basement property that needs zero work. It's on great condition in a very safe area. Sellers are firm at $190,000 which is about 10-15k higher than most of the other properties in the area. Rent is $1500/ month. Our daughter will be living there 3 of her 4 years as well, so it will be serving dual purposes. I'm just not sure if it's a good deal and would appreciate any advice. Thanks so much.
Investor · Boston, MA · Member since 2016 · 245 posts · 436 votes
10y
Let me preface everything I say here with the fact that there isn't necessarily enough information for me (or others) to definitely tell you whether it is or isn't a good deal. If you are looking at the property as a straight investment, then at first glance it does not seem to be a great deal. Many people on BP use the 1% rule to quickly evaluate properties, and this property does not satisfy the 1% rule (this rule is basically a quick way to screen whether or not a property has the potential to cash flow and refers to the rent needing to be 1% or more of the purchase price.)
As I said, that rule is just a quick way to screen properties and further analyzation is required. However, your goals may be different than that. You mentioned it's for your daughter to live in while at school, and if the goal is to provide her a place to live at school while paying slightly less than on campus living or renting, then maybe you would consider this further. However, as a pure financial investment, it does not seem like a great deal.
Rental Property Investor · Saint Louis, MO · Member since 2016 · 16 posts · 5 votes
10y
Thanks Axel, I have the same opinion as far as a straight investment property is concerned. My husband feels that it will at least serve a purpose while our daughter is at school and if we want to sell it when she is finished then we've lost nothing, assuming we get at least what we paid for it.