All Forum Posts by: Sunny Basu

@Bill S. @Jared Bouzek @Carl Olsen @Dan Mackin @Travis Sperr  thanks for the inputs , they have certainly made me more educated and helped put things in the right perspective and will help me make a more uniformed decision. Thanks for your time

@Travis Sperr thanks for your comments, you are right I was not correct on a couple of comments

@Travis Sperr thanks for your reply. Yes looks like its getting tight. 

Yes Zillow calculator includes Taxes and Insurance and PMI.

I just looked up Zillow Rentals and Zillow On-Sale Simulataneously (for example for Tallyn's Reach). Seeing rentals of 2.6K and 2.8K (asking price on Zillow) and similar homes(3/4 bed and 2/5/3 ba) listed for sale between 400K to 430K.

There is no way for me to confirm the FINAL rental prices , but from the asking price it does look like you are absolutely bang on -- not much of rental yield (specially considering Property Manager + Maintenence etc ). Mortgage payment = $2600, rental between $2600 and $2800

The only positive factor is that if I stay in the house for a year -- then I would be saving the 20K towards my current apartment rent

However in 3 years time, when I am able to ay 20% of the home value (with extra payments) -- the Mortgage payment would be 2K and rental 2.6K (assuming no change). So a $600 per month margin

@Dan Mackin thanks for your reply . Zero houses as of now . i will try to research the other loan options (what are they ?). I earn in six figures (lower end) -- so not sure whether i would still qualify.

Apart from Good schools, other positives to me are Newer homes (as opposed to smaller older homes in DTC/Centennial area), close to Southlands mall and Aurora Reservoir (Tallyns Reach, Beacon point, Wheatlands), 20 min drive to DTC and 25 min to Airport (via 470 toll rd). All in all , looks like these factors may attract families to my rental property.

Regarding Appreciation of property -- am wondering what it would be if I am able to hold the property for 5-7 years.  I am hoping (as some experts are saying) that we would continue to see  between 8-10% annual appreciation and may be Denver suburb prices would become closer to prices in CA, but on the other hand I keep hearing that prices have hit a plateau. So a bit of a gamble there 

As both of you mentioned, looks like the "sweet spot" is indeed the $300K mark. Shall do some more research to see what options I have ( area, home size etc) at that price point and the ongoing rentals.  Most of the homes in the above areas which are in the 400K range were in the 300K mark a couple of years back -- so may be I may have missed the golden boat -- but still don't want to sit in the sidelines without doing anything

Would really appreciate some feedback on the below specific scenario from Denver experts.

I will be in Denver for maybe another year max before moving out to another city/state (due to the nature of my job which keeps me moving every 2-3 years). 

I am planning to invest in a house in Denver as looks like the property prices would keep on appreciating and the city itself is growing.I will be the end user for the 1st year or so before renting out.

I am very familiar with the Southeast Aurora area ( The Farm, Siena, Wheatlands, Tallyn's Reach, Beacon Point etc) and would like to invest there.

What is the price point I should look at which would have the maximum possibility of cash flow from rental income ? I see a few homes in this area between 400-450K. my target rental audience would be family with kids due to CCSD and some highly rated schools in this area.

Questions:

***** Am going to give around 5% downpayment , hence would have to pay MI. I am able to see the "asking price" for rental properties in this area in Zillow, padmapper but not sure how much they actually rent for. 

Any idea on rentals of SFH in this area ?

***** What is the price point I should look at which would have the maximum possibility of cash flow from rental income ? 

For example: with 5% down -- a $425,000 home would come to $2500 per month mortgage ( as per zillow mortgage calculator)

***** If a slowdown happens and rental prices drop, how much of a drop (worst case) can be expected. I can absorb $200-300 every month for 2 years ( Rental minus Mortgage(+MI+Taxes) ) 

***** When i move out of state -- i may have to hire a Property Manager -- so I  have to factor in that cost as well.

Within 3 years I plan to put some extra money into the Mortgage and get rid of the PMI, so that should take out the $250 per month extra payment.