Maybe my 1st rental ?

[Michael Widick]

Looking for a common sense check..

Just completed my first flip, looking to use profits towards my first rental. Been researching and learning anything and everything REI related for about a year now and feeling good.

Came into a offer on a 3/2 1300sqft in

Columbus GA. Not the greatest neighborhood but I think it’d probably be great for renting out.

15k asking..

$40-$50k in repairs

ARV = $75-$99 (clearly based of level and quality of materials, fixtures, etc..)

With those numbers I’m not feeling super confident about flipping, especially after taxes, tag and tile. Would almost be upside down.

However, thinking this might be a good first rental, especially to BRRRR ..

Comps in the area are renting from $800-$1300

Most are 3/1 so mine being a 3/2 clearly is more tangible.

I own my own construction company, so not super worried about repairs/ labor prices etc. id also be managing my self. Ran the numbers through the BP calculator and would net $800 a month after tax, maintenance, etc.. if rented at $1000am

Whatcha y’all think?!

[Daniela Andreevska]

Hi, @Michael Widick!

I'd definitely go for a rental property in your case. Owning rental properties come with important benefits over fix-and-flip, mostly the ongoing stream of monthly income. There are a few significant factors which give you an advantage. You are familiar with the market which is great when you are starting our as a rental property investor. You are able to minimize both the startup repair cost and the long-term maintenance expenses through your construction company. As you're local and already in the real estate business, managing your own property will further lower the monthly expenses. Overall, this is quite a good recipe for success.

Moreover, my team has currently conducted nationwide analysis of long-term rentals across the US. Columbus, GA offers a city-average cap rate of 3.1%. While this does not sound like a lot, it is comparable to what we see in top markets at the moment. So your market is a good one to invest in right now.

Good luck and keep us updated on what you decide!