Our annual premium is about $380.We also carry $1 million in liability under our homeowners insurance policy for all of our rentals.

I had a tenant tell me they only wanted to pay 600 a month when rent is 850.They said they will move.I said that is fine with me.250 times 12 is 3,000 a year in lost market rent.So if I took a tenant at 600 times 12 is 7,200.Instead I have a tenant at 850 times 12 is 10,200.So I can have it vacant for almost 4 months and be at the same point.Plus the past tenant has a judgment and I will have a company garnishing their wages for me.Another item to consider is the cost to get it re-rented.If the tenant has lived there a long time then fix up costs will be high compared to a newer tenant you have to get out unless they had animals,smoked,etc.Once you file eviction on the tenants most likely they will not pay anything as they are saving to move and go somewhere else.The down side of a vacant unit is vandalism and crime,more maintenance,and worrying about busted pipes etc.Hope it helps.

I am not holding him to a 5,7 or 10 year balloon as this will still be a long term investment without the landlord headaches and maintenance.

Assuming all operating costs and maintenance costs are same or similar which would be the better buy.

However, I'm not sure what figure to use for repairs/maintenance as it can vary depending on what breaks down.

Assessed value has nothing to do with market value or what you should pay.You are buying this property based off the income approach as an investment but generally single family properties use the comparable sales approach for valuation,lending,and appraisal purposes.Local recent sold comps would be a better gauge for current market value than looking at any assessment value.Now you do want to look at assessed value for property taxes.Fighting the property taxes and getting them reduced will improve your yearly bottom line.Make sure the cash flow of the property they are reporting does not include exemptions that do not apply to you or they have been putting off capital costs and maintenance to show and INFLATED NOI.

It sounds like you have experience working on homes, but this one sounds like a big place that has been deferring maintenance for 30 years.

.* Provide annual photos, inspection, updated realtor comps* Provide quarterly NOI, debt coverage ratio, etc.* Stress that their collateral is a tangible, closely-managed asset, in a very stable area, providing a basic need, housing.Anyway, thinks for all the replies, would continue to be interested in feedback from others.

Also, some regions have issues with expansive clay soils (requiring continued maintenance over seasonal changes in soil moisture content).

Tenant dies in the fire.Possible Result:LawsuitPlaintiff = tenant's family/estate.Defendant = maintenance person.Defendant = you.Cross-Claimant = you.Defendant in Crossclaim = maintenance person (you sue maintenance person claiming any judgment against you is ultimately maintenance person’s responsibility.