Hello all,
Very strongly considering this deal as my first rental. But I want some people's advice here first.
It's going to be a rental property. Multi Family Home with 2 units. Each unit has a living room, dining room, kitchen, 2 bedrooms, and 1 full bath. Each unit is 900 sq feet. Shared basement with separate storage areas. Shared laundry area in basement. 2 gas meters, 2 hot water heaters, 2 furnaces. Seems pretty clean.
Asking price 102,000.
My offer 100,000.
Current rents in the area are $600-800 per unit. So I'm lowballing my estimates @ $650 per unit = $1300 per month.
Putting 20% down and taking a 30 year mortgage out for the remaining 80k.
Non Homestead taxes are $4400 per year. Insurance $1700 per year.
So monthly expenses look like this:
mortgage + taxes = $731
Insurance = $142
Vacancy 5% = 65
Repairs 10% = 130
Cap Expenditures = $50
Total = $1118.
This is in a very trendy up and coming area in Michigan and I fully expect rent and property value to go up over the coming years.
The risk is that it's an old building, about 90 years old. Something big may happen one day costing me a lot to fix. Of course I will be having a thorough inspection. However plumbing and electrical were all updated about 10 years ago.
So how does the deal look? Any advice much appreciated.
Danny
