All Forum Posts by: James Harryton

@Dan H. I am somewhat familiar with Polk county but I don't believe the rental demand is super high in that area in general. That's the main reason why I wouldn't worry if there were no hits in the first two days. Now we are 4 days along, so if still nothing, I would start to worry and do something about it.

 @James HarrytonAny update for us?

I don’t believe it would be able to accomplish significant cashflow due to the location. My next goal would be to rent it for that and not take any cash flow from the property yet just keep it in the reserves then try to refinance at a later date or see if the home appreciates enough 

 I disagree about not worrying about getting no interest in 2 days. Every market is different, but when my add first gets posted get inquiries immediately.

These are rough numbers, 30 inquiries results in 5 to 8 property views, that results in 1 to 3 applications received. In my market, it requires a lot of inquiries to get a qualified tenant. If you have zero inquiries, you are not likely to get a qualified tenant.

By the OP’s own numbers, he is above the top end of average rent range.  OP does not state any reason his unit warrants above average rent.  Note, because it looses money otherwise might be a reason from the LL’s perspective but is not from the tenant’s perspective.  

I highly question the underwriting performed.  Note I do my underwriting with conservative numbers so I would have used $1500 rent, but seeing that the OP apparently wants to use top down f market rent.  

$1800 (high end of rent range) - $1535 (hopefully mortgage includes full PITI) - $90 (5% vacancy) - $400 maintenance/cap ex - $180 PM (at that low rent point I am using 10% all inclusive) - $50 misc (bookkeeping, utilities that are not tenant responsibility such as slab leak, tax man, allocation of asset protection, etc). Negative $455/Month and at that price/rent point, poor historical rent growth and appreciation.

What is the expected source of return?  Note residential RE is not passive even with the use of a pm.  To be worth the effort, it should produce return significantly greater than passive options.   D you see this property accomplishing that?

Good luck

This doesn't sound like a wise investment. An investment should pay for itself and have enough left over to set aside for reserves. If you buy a house with a $1,500 mortgage, you also need enough to cover taxes, insurance, and maintenance. Then it would help if you still had more to set aside for future vacancies and capital expenditures. A good investment will typically bring in around 50% more than the mortgage payment. Using your house as an example, I would want to rent it for at least $2,300 or more. You will probably lose money even if you rent it for $1,800.

Ask yourself what makes your property worth $2100 (incl water) when rents in the area range from $1500-1800 (assuming that doesn't include water)?  If it has something that the others don't, then perhaps.

One option is to lower the price and have tenants pay for the water.  They see the lower rent and don't factor in the extra expense.  I have water bills in my name for two places and tenants add that cost onto the rent when I get the bill every 3 months.

It sounds like it is priced a bit on the high as you suspected. How many days has it been listed? If it is only a week or so, I wouldn't be terribly worried. If it has been a month, then you can be very sure it is too high. I would probably have it at $2000 or 1950 to get someone in there. You don't want it empty for 3-4 months before finding a good tenant.