Lehi, Utah Rental Property Feedback

[Taylor Johnson]

Hey all - I'm currently looking at an opportunity to invest in Lehi, UT.  I was working with my agent on a different property when we told me that he had personally purchased one of these townhomes and was now renting it out.  Here is how he broke down the deal with his actual numbers and then projected numbers if I jump in now (my cost is higher since cost has already gone up).

I'd love any feedback!  I also ran an analysis on the BP calculator and included a link to the listing itself where you can see the address.

Thanks in advance for any thoughts!

Best,

Taylor

LINKS: 

Listing

Analysis

Real Estate Agent's Breakdown:

Purchase Price: $307,211

Rate: 4.875%

Down payment: 25% - $76,803 (I did this to get the best rate, I could have done just 20% to still drop mortgage insurance, rate would have been .125% higher or so. Maybe a good option for you tho since that's essentially 16K less down)

Annual taxes: $1860 (or less if you finish basement yourself)

Home owner’s insurance: $25/ year. Two reasons why this is so cheap - Edge has a master insurance policy that covers the outside, you’re only responsible for the inside. And because this is a 2nd + property of mine my insurance company gives me a huge break. This same incentive would apply to you.

HOA Dues: $125/ month. Covers clubhouse, pool, fitness center, pickle ball courts, parks & common areas, outside building insurance.

30 year term.

So you should have $1,501 total payment. My monthly rent is $2,425 total, rented by individual rooms, here is the breakdown:

Master: 550

Medium room 1: 400

Medium room 2: 400

Medium room 3: 400

Basement: 675

I should have charged 425 for the medium rooms but just wanted to fill it, on my next year's contract I'll raise that. I'm also debating raising the Basement to 700. The master surprisingly was the last room to fill.

Let's assume you finish the basement yourself and just do the 20% down option, here are the numbers:

Purchase: 297,000

Down: $59,400

Rate: 5.125% ( I added .25% - 1/8 for the increase and another 1/8 since rates have gone up since)

Taxes: 1800

HO's insurance: $25/ year

HOA: 125

30 yr term.

Total payment: $1,571.

If rates go up another 1/8 (5.25) then total payment = 1,589.

Not bad overall. I would plan on renting out your unit for $2500 total. Now remember you will incur about 15K or so on finishing the basement.

[Rhett Dean]

I just wanted to jump in here. Its great if you can do this that's seems a steep price for the purchase price of the townhome in Lehi unless its at Ivory Ridge. Many HOA and their CC&R's will not allow you to rent a townhouse out like this and if they find out will serve you a notice. So always make sure its ok. With 5 others in the home I imagine parking can become an issue and if you have six cars around your Townhome neighbors will start to complain and if that happens they will check into this and if not approved could cause you some issues. A unit like this rented to one occupant would fetch 1700-2000 a month in the current market.