Help Analyze my First Deal

[Kolby Wright]

Asking Price: $30k

Past Rent: $450/month

Property is a 3 bed, 1 bath sitting on 1 acre in my hometown of Valliant, Oklahoma. (Small Rural Area) 

Owner says the home stays rented well and that he was able to get $450 per month. Home was last rented about a month ago. He is selling due to relocating for work. 

The property is somewhat older, I am unsure of what year it was built. Interior is outdated; ceiling tiles, old ugly linoleum, wood paneling, bathroom/kitchen plumbing, outdated lighting fixtures.

Owner says it rented well, but I would feel better if I made a few cosmetic repairs to brighten the place up a bit.  Is that a good idea or waste of time/money? 

I am a carpenter and cabinetmaker so I would take on the repairs myself to save on labor. 

For now I only have a few pictures of the exterior. Let me know what you guys think! This will be my first rental property, while I am excited and ready to begin, I also don’t want to jump into a bad property. I appreciate the help and if I left any important info out please let me know!

[Patrick Menefee]

@Kolby Wright I agree with points that both @Martin Tyler and @Brandon Sturgill made...if he's relocating for work, maybe he'd be interested in taking some cash to help with the move but then receive monthly payments. It can't hurt to ask. 

Additionally, look at the potential in the area. Are there other properties renting for much higher than $450? Or are you pretty well capped there? If you're at the upper band of your market, there's no sense in redoing cabinets, flooring, etc. if there's steady demand. 

But if there is upside potential and you can increase rent by a bit using the skills you have, then it's probably worth it. Remember-you aren't living there. Don't waste money and time making updates that you'd love to have, but won't actually yield any return. 

That ties into the last question you had about the age. Nothing wrong with older houses if you plan accordingly and have the reserves set aside (both up front and monthly) to cover any major repair that may happen. If you can do that and the numbers still work, great. If not, it's not the right choice. 

Good luck!