Find out if her total cashflow is really net positive…. Aside from mortgage, how much is her property tax, hoa, insurance… Is that more or less than $700/month.
Second, she needs to be honest with herself if she wants to be a landlord and especially a landlord that doesn’t live in SD. Some people don’t want to deal with being a landlord. If that’s the case, then she needs to find a good property manager. People like to focus on how much money one can potentially earn. My suggestion is consider how much pain in the ass you can tolerate. Example: I had 3 plumbing breaks on 3 separate condos over the past 8 months. I don’t mind and I’m use to dealing with it, regardless if it’s my fault or the condo next to me’s fault. Is your friend someone that is afard to deal with PITA things?
For the sake of your friendship, don’t volunteer to be her full time property manager, unless you are a real estate person yourself. No good will come of this. You won’t be happy in the long run, and if you don’t do that well, she won’t be either. Friendships more important than that. Being short term help =ok, being long term property manager can be a PITA.
Lastly, if she sells her home, she can get up to $250k in capital gains tax free. If she has no plans of moving back to SD, it might make sense to do it. $250k, she can do a lot with that in NM.
I remember back in 2005/6, I was considering buying homes in Albuquerque too. The prices there in better parts of two were around $200kish too and the rent I think was around $1500/month…I wasn’t ready to be a remote landlord… I guess you need to ask yourself if you are..
