All Forum Posts by: Digger Odell

RE: Rentometer... I do not see that they adjust rent by home size so $1225/month "average" may be too high for this small home. Might be more like $1000 or perhaps less. What do you folks feel is correct?

Well here is what I can tell you as of now.

Built: mid 60's

Size: around 750 square feet

Price: $60K (my mistake stating 69K)

Taxes: $650/year

Sewer: $350/year

Water: says "city" but I think those homes have wells. If so free water.

Association fee: $400/year

Trash: $420/year

Rentometer says average for the area is $1225/month as does Zillow

This is a narrow, longish home. Kind of looks like Airforce One inside in that you walk through to get to the various rooms. All wood paneled. Maybe a bit too much on the wood but they must have liked that look. 

My concern with lending is I have no real control over what happens. If it's just me and my two little houses I know where the $$ are. Lending to (potentially) someone who knows less than me, if that's even possible, sounds scary... but maybe I'm just not up to speed on how it all works.

There is a small home for sale just a mile or two from mine. Asking $69K. Impeccably maintained by the same owner for the last 40 years. It's small (2 bedroom, 1 floor) but perfect for a retired couple or a single adult on their own. Taxes are low. Less than $1000. This is probably the kind of place I'd want to take a look at... if, as Jeff says, I can make the numbers work. 

I'm local so I can keep an eye on it. Heck, I walk by it several times a week with my little terrier. Buying local seems a wise move if only for it being easy to take care of things as they come up. Show the place, fix the toilet, etc.

Comments?

Thanks Jeff.

A point you made, and one I was also considering, is the maximum cost of the homes you have acquired. Between 40k and 100k ready for rent. I take it there is a limit, then, to what you will pay for a home in order for it to make that 10% ROI as a rental.

Can I ask you what size home these would be? That is, how many bedrooms is best for easier rental to, say, a family with kids... if that is your best customer.

I'm looking to invest cash in a single family home or two and use them for rentals. My goal, like all of us, is to try and make more money doing this then letting the money sit in a mutual fund. This is where it gets a bit cloudy.

I'm trying to wrap my head around some of these articles and podcasts where folks claim they have X amount of monthly income from X number of properties. There is very little discussion about what their actual costs are for things like taxes, repairs, accounting, maintenance, legal fees. Always "I'm making $5000 a month in income and you can too". 

Can someone give me some honest, true numbers for a property or properties they own. What they actually clear (net) on any given single family home after all expenses for a given year or, say, after 5 years of ownership?

I wanted to close out this discussion I started with the final result so others will know what I did.

The town held their Board of Assessment Appeals on the revaluations. I filled out a simple form and got a date for my meeting. I hired an appraiser in my area who had years of experience doing property valuations. That cost me $400. He provide me with a 25+ page report that had everything to do with my home and the selling prices of others in the area. The town had me accessed for $280K. I was asking that it be set back to $225, which is what I had paid for it at the end of last year during the time of the 5 year revaluation. 

In the end that is exactly what I got. The property is now accessed for $225 and my yearly taxes are reduced by around $1000. Now, some of you will say I shot myself in the foot by reducing the perceived (resale) value of the property. I think not and since I plan to stay here for the rest of my life, God willing, I'll take that $1000 and put it to good use.

Comments please.

Yes, there is a form that I will need to fill out. Just waiting for notice (this time I will go down there) they are ready to accept them.

Question on getting an appraisal. If the property was listed with a reputable agent can one assume the asking price was more or less on target with market reality, so therefore, if purchase price was fairly close to that price is this enough to show the true value being it was so close to their their reval process?

What I'm saying is, must I get or should I get a new appraisal before I go down there? Is the sale price and the botched square footage enough?

Specifics: The town has it close to 30% higher in value than what it was listed for and eventually sold for less than a month later. They also have the living space listed as close to 35% more than actual. In fact, when the insurance company sent their 3rd party home inspector out he walked it with his wheel and came up with the true (exterior wall) measurements. They sent me the final report that shows it clearly.

I need to try and get the property tax on my new property reduced. Town recently (last October) had a reval and my property is way off from both what I paid for it in November and how the town has it measured for living space.

I missed the "informal" opportunity to go before the company that did the reval due to the town sending the notice to the prior owner. Now I have only the formal to try and make my case.

Have others been through this and how do you approach it. What do you bring with you to support your case, etc.

Thanks!

Great replies, thanks. 

... and would you also follow that same 3X rule for a room renter (roomer) in your home?