see above post. I don’t think 3% of purchase price is affordable by my potential tenant. also, property tax is 1.2% so now my “investment” is less than 1.8%. then add other expenses. Pretty much goes down to 1.5%. Stick money in high dividend stock is a better choice no?
[quote=flu][quote=bobby][quote=flu]The only question you need to ask yourself is
do the numbers work out with a decent positive cash flow for any random tenant.
Also imho, if I were you, I’d do myself a favor and rent to a complete stranger, not someone I have any sort of relationship with (professional or otherwise).
Either you’re not going to be happy because you won’t be able to get the best price you can get, or the other person isn’t going to be happy, because they think you’re trying to take advantage of the relationship with you….or both…[/quote]
thanks for advice. will take into account and seek advice from friends also.
the numbers definitely don’t work out. ie the “mortgage”* will be higher than rent. Not to mention taxes and maintenance.
*I put “mortgage” b/c this will be all cash transaction.[/quote]
Well, if it’s an all cash transaction. You can look at it the other way…
Figure out how much your cash on cash return will be (factoring a reasonable estimate of your rental income with not 100% occupancy). If you’re around 3-4% in the bay area, that’s not bad. I’d probably do it in a decent part of the bay area. Still beats that 1% CD, and I don’t think you can really go wrong with bay area housing in the long run :)[/quote]
