As the title/description states, we have a rental that just had appraisal done that came back really high and now the numbers really don't make sense. Any feedback is always appreciated.
In the mid 90's my grandfather had the foresight to purchase and renovate a four unit property right next to the University of Virginia's football stadium.
Fast Facts (approximate):
- Market Value: $675,000
- Mortgage: $170,000
- Equity (20%): ~$370,000
- Total Rent: $3,600
- Land Assessment: $300,000
We rent this particular property through a property manager who says part of the reason why these 2/1 unit's rents are so low are because there aren't in-unit washer/dryers which I get. Some 2/1 college rentals this close to the university can command well over $1200. Even so, the numbers still wouldn't be great.
Our goal is to grow the portfolio. We have a duplex and three other single family homes in the area with some equity. Two of which can be converted to duplexes via additions. We also wouldn't be opposed to taking equity out and investing it out of state.
I also want to take into consideration the intent of the University. They seem to be buying up more property year over year and eminent domain could be a concern in the future (one of the SFH's is next door as well). Saying that, I'd be hesitant to 1031 in case we're able to to build a larger apartment on the land or get a sweet offer from UVa.
I guess my question is what are some options in considering this scenario?