High End, Luxury Rental Attempt ($6,500/m)

[Hayden Bowles]

Investment Info:

Single-family residence buy & hold investment in Mesa.

Purchase price: $890,000
Cash invested: $140,000

Rented out my personal home when I didn't need it anymore. (Only started it as a rental in January of 2021). 6 bedroom (+ office), 5 bathroom. 6,100sqft on 1 acre.

What made you interested in investing in this type of deal?

Was a personal home for myself, also stole it at the time. Great price and the previous owner was in a rush to sell after a divorce.

How did you find this deal and how did you negotiate it?

On the market for only a couple days. Was touring homes and saw about 15 over a 3 day period. This was the first one on the first day and I fell in love with it. Knew it was underpriced too in comparison to what I saw. Offered list price and got like $5,000 in closing costs covered

How did you finance this deal?

Standard 30 year fixed, 3.3%. Mortgage is $4,001

How did you add value to the deal?

Painted the whole inside, new carpet and a few small things which completely changed the feel of the home. Was very "early 2000's" feel with brown walls and stuff.

What was the outcome?

Great equity gain, and now a rental at $6,500/ on a 2 year lease with 1 year paid in advance. Plan from purchase date is a 3-5 year hold. I believe homes like this in Arizona in a good area will be worth 1.4-1.5M+ in a few years. Compared to Colorado, Utah, Idaho.... etc, they are all seeing similar growth. In comparison to California pricing too (would be 2+ Million there). Theres no way this doesn't get close to that, it's just so much house for the money right now.

Lessons learned? Challenges?

Honestly I thought it would take a few months to get a tenant in there. Had someone signed, paid and keys in hand within 9 days which blew me away. Good amount of applications. Upon reflection, theres not a lot of rental homes in this price range. Supply & Demand I suppose.

Have played around with the idea of high end AirBnB. Maybe some day :)