[quote=carlsbadworker]. . . Most people started out with the number and I don’t think it is the right approach. . .[/quote]
carlsbadworker, I agree with this. I would not overthink to the ground such a purchase if I was already intimately familiar with the area it was situated in. If the current asking prices are as low as they have been in the last ten years, the prospective property has no MR or HOA dues and mortgage rates are at historic lows all at the same time (such as what we’re seeing now), it’s kind of a no-brainer if you have 30% down and can qualify for the loan. Whatever repairs it needs before placing a tenant in it (short of structural problems) is irrelevant if purchased at the right price. Consider that you will walk to the property from your own residence or drive to it in =<10 mins for "self-management" purposes.
I think if you are looking for an investment rental property, you should stick with an area you are highly familiar with. If this is the case, often, you will already have potential tenants lined up for the property prior to closing escrow on it. SFR's in certain areas where family ties are strong have a captive long-term audience for rentals. It's not uncommon for tenants to stay in a rental SFR in these areas for 5 - 15 years. This is likely much longer than one would stay in a condo. Lack of vacancies have to count for something.
I'm failing to understand why some Piggs might think condos have a better monthly cash flow than low-priced SFR's with no MR or HOA dues. I’m just not seeing that constellation on the street – at all. I’m seeing long-term, happy tenants.
Yes, I have been a landlord of five units total – a duplex (930 sf each side) and 1200+ sf house w/two rear rental units. Sold the duplex in 1990 and the house/rental units in 1994.
Edit: I am referring to the purchase of buy-and-hold rental SFRs here, NOT “buy-and-flip.”
