First Deal Analysis Opinions

[Tina Opel]

I am looking to find my first rental property and I have one that I feel would be a really good investment and was just wondering what others think.

The property is a duplex, built in 2003 in a very desirable town with excellent schools. Each unit is 1,500 s.f. with 3 bedrooms, 1- 1/2 baths and a 2-car garage. Two stories each. One unit has just been totally redone inside, with all new appliances, flooring, paint, fixtures, etc. The other unit was done 4 years ago, but has been repainted and still looks to be in excellent shape. Many major replacements have been done in the last couple years as well. 

The asking price is $209,900 and I have been pre-approved for an FHA loan with 3.5% down for a 30 year term. Property taxes are $2,500 and insurances are an estimated $3,000. Tenants cover all utilities so I included $100/month for maintenance, $160 for vacancy savings and $210 for cap ex in my analysis.

Both units are currently vacant but unit 2 was posted for rent about a week ago with some interest, so even though I am prepared to have to find someone right away I am expecting that it will be full by the time I would get the keys. In the past the tenants have paid $1,095 for unit 1 and $995 for unit 2 (this is what I used in my analysis to be conservative), but the seller has unit 2 posted for $1,095 and thinks they will get it. According to Rentometer the normal/high end in this area is $1,175.

If you need more info let me know. I am meeting with my realtor and the current owner tomorrow to go over their records for the property, so if there is anything that I should ask them please let me know.

Thank you!