I rent in a gentrifying area of Charleston, South Carolina called the Eastside. The area is still mostly low income. The few people buying are either investors snagging up loads of properties and then renting them out to college students, and a few early adopters. Families with children are rare at this point.
I'm considering a property that isn't on the market that the seller is asking $365,000 for. It's a duplex, and one unit is 3 bedrooms and 1 bath and the other is 3 bedrooms and 1 1/2 baths. It's located close to city housing projects. Just a block up the street I've talked with 3 guys that are paying $2,500 for a 5 bedroom home that is similar. $500 a room seems to be a fair, going rate for the area.
Most of the homes were built in the 1800s, but this one was built in 2002.
Just three blocks away major projects are happening. There's this $80 million project that is just breaking ground: http://cctre.com/development/midtown/
This one is nearly finished: http://www.elanmidtown.com
This one is finished: http://www.400meetingstreet.com
This one had to stop with the recession but is supposed to start back up: https://www.facebook.com/CigarFactoryCharleston
The property that I'm looking at has deed restrictions placed on it, and the current seller has proposed that I put down a small amount of money 1-2k with an offer to give the seller's attorney several months to get the deed restrictions lifted. The deed restrictions restrict the amount of rent that can be charged and currently each unit is being rented out for roughly $800. Currently the state has removed their deed restrictions but they still have to remove the City's.
Ideally, if the deal worked out, I'd like to close in March or April.
My goal is to make a good investment that will get me started in the right direction. I'd plan to live in it, rent out 2 rooms in one of the units and then rent out the other unit.
If I'm understanding the 2% rule this property wouldn't fit it (meaning that I'd have to get $7,300 in monthly rent to justify buying a property at $365,000, correct?).
Does anybody have any advice, more questions that might help me make a good decision, or can point me to learning sources? Thanks in advance!
