Beavercreek - is this a good deal ?

Question

Just picked a random sub 100k SFH as my tonight's analysis on greater Dayton OH area.

Rental calculator seems to suggest this is a good deal according to 1% rule ( not quite 2% but looks pretty good to me already ), the rent estimate was a guess from a near by rental ( there aren't many rentals in Beavercreek somehow ).

Above average SD , all three schools are rated 7 ( not sure if this is considered as B, B+ area ).

Obviously the numbers would only make sense when the estimate rent can be archived, so my questions for Dayton / Beavercreek BPer -

• Does Beavercreek have high rental demands ?
• Is above deal common in this area ?

Christina Carey · Answer

The property in the realtor.com link is in Kettering, not Beavercreek. Still a nice area though. We're managing several about a mile away, in a better part of Kettering - similar size 3/1s, but brick with attached garages; cosmetics are semi-updated. Only getting about $850 for those leased just last fall. If they were fully-updated, might get $1,000.

Problem with Kettering is that rents are not significantly higher than in the City of Dayton, but the taxes most certainly are. Taxes will be more like $180-185; new levies begin for the 2018 tax year, payable 2019 so they aren't reflected in the numbers yet.

You should budget 10% for management to be safe unless you already have a local manager committed to a lesser rate.

Condition-wise, it's unlikely you'll need to do much, if anything. The listing agent is also the owner, who does a few flips a year - he tends to over-do things sometimes from what I've observed.

Bottom line: cash flow will be razor-thin if you're financing at 80% LTV.

Steven Leigh · Answer

I agree with Darrin. The problem is not that Kettering isn’t a good area for rentals, the problem is you can’t buy deals at market value from the MLS and expect them to cash flow. You need to market for good deals, or get on the buyers list for wholesalers in the Dayton area who have deals at investor prices.

In fact, Kettering is one of the best areas in town for both flips and rentals, as schools are great, taxes are reasonable, and there is a wide range of homes available at different price ranges.

Ozzy Smith · Answer

there is a bunch of info missing from your equation here. First off as a local investor with extensive knowledge of the area I have no idea if you’re rent projections are right bc you didn’t say number of bed and baths. The Arv seems low for Beavercreek but again no idea without bed and bath numbers.  You estimate the repairs to only be $2k. What does that cover (not much). If you want to talk one on one about the area I’d be happy to help but would need more info before I say yes or no to a good deal

Darrin Carey · Answer

First thing, the property is in Kettering, not Beavercreek. Totally different area, different schools, different property taxes, but generally a good area for a buy and hold if you can get the right deal.

Charlie Cameron · Answer

Chris,

The problem with Beavercreek for SFR's is the taxes. I own a home in Beavercreek and I'll be selling it when I have to move in a half a year because the rents would barely cover the mortgage/taxes/insurance. And that's for a newer, 2100 sq ft 3 bd 2/2.5 ba home near shopping/dining. The taxes really cut in to cash flow. I'm not left with much room for repairs/capex/turnover costs.

If you did want to do SFR's in Beavercreek, I'd recommend looking for the single story ranch style brick homes that need a decent amount of rehab. Then you'd have lots of options to go with: cash flowing rental, BRRRR, sell.

Best of luck to you!

Steven Leigh · Answer

I agree. The “worst” areas of Kettering are actually some of the best deals in all of Dayton, in my opinion. Because the purchase price can be very low, the rents stay pretty high because of Kettering schools, and even though taxes are higher than other areas you get a lot of tenants who don’t ever want to move because of the school system.

Christina Carey · Answer

Kettering in general is no problem for us. The "worst" areas are still solid C neighborhoods, and I would say, the minority of Kettering neighborhoods.

Chris Lin · Answer

@Andrew Angerer thanks for the local insight ! I will check 45440 and Beavercreek out.

@Steven Leigh Thanks , I guess for deal analysis MLS may be one of the best sources to get BP scrutiny  :)

@Christina Carey may I ask - what areas in Kettering you'd be very comfortable  managing properties ?

Andrew Angerer · Answer

I live less than a mile from the property, I would say that $1400 is too much for a renter, the neighborhood is between a B- or a B at best.  I believe that the population is trending away from this area and towards the south (away from dayton) Additionally the property taxes in Kettering have been going up quite a bit, so be sure that you factor that into your calculations, as you would need to increase rents to keep up.

If you do want to invest in Kettering, try around Rahn Rd in the 45440 area, that is very close to the Costco shopping area and is on the upward trend.

Regarding Beavercreek, it may be good to consider since it is one of the few dayton suburban areas that has positive population growth. Plus being close to the air force base helps anchor a number of rentals in the area.

Best of luck and thanks for the review!

Beavercreek - is this a good deal ?

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