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re: Buy, sell or hold?
Posted on 6/9/16 at 1:11 pm to Fat Bastard
Posted on 6/9/16 at 1:11 pm to Fat Bastard
I want to be a landlord who earns a decent profit while renting out places that will appreciate over the next 20 years.
At that point, I will hopefully have the option to retire from my day job and live off the paid for places OR just sell them all and go to a beach somewhere.
Tell me how to do it. I've got two right now with the following data:
1,972 sq foot townhome - Paid $231,500k in December and two just sold for over $270k. Getting $1,895/month in rent (note is $1,052/month + 180.00 HOA dues). That is probably right on target rental price wise in this area.
1,255 sq foot townhome - Paid $142,500 in May 2015 and they are now selling for $163k+. Getting $1,200/month (note is $715/month + 104.50 HOA dues) and this was my first one. People are now renting these out for $1,400 (I'd probably have to do some slight upgrades to get this and will probably do so when they leave). This renter has been there for over a year and pays on time every month, never calls me, and OCD neat.
I am not cash flowing a ton per month but I feel it's decent. I am also gaining principal pay downs of $112/month and $230/month along price appreciation so far of +$20k (1 year on the $142,500 house) and +$44k (5 months on the $231,500 house).
At that point, I will hopefully have the option to retire from my day job and live off the paid for places OR just sell them all and go to a beach somewhere.
Tell me how to do it. I've got two right now with the following data:
1,972 sq foot townhome - Paid $231,500k in December and two just sold for over $270k. Getting $1,895/month in rent (note is $1,052/month + 180.00 HOA dues). That is probably right on target rental price wise in this area.
1,255 sq foot townhome - Paid $142,500 in May 2015 and they are now selling for $163k+. Getting $1,200/month (note is $715/month + 104.50 HOA dues) and this was my first one. People are now renting these out for $1,400 (I'd probably have to do some slight upgrades to get this and will probably do so when they leave). This renter has been there for over a year and pays on time every month, never calls me, and OCD neat.
I am not cash flowing a ton per month but I feel it's decent. I am also gaining principal pay downs of $112/month and $230/month along price appreciation so far of +$20k (1 year on the $142,500 house) and +$44k (5 months on the $231,500 house).
This post was edited on 6/9/16 at 1:21 pm
1
Posted on 6/9/16 at 1:49 pm to Serraneaux
Prices go up and down and fluctuate. Problem is you need enoug cash flow to get by on if housing prices take a big dip in the future if selling is your goal by then. I never count on appreciation even though mine are appreciating based on current market values.
You know your area better than me. That's your playground and if you feel good about the area you should be ok based on your goals. DOn't bother giving me vacancy and maintenance estimates. you should always have 6 months reserves for that for each home anyway to keep you safe. Or you can factor that in if you do not have reserves now. without factoring it in, you are getting around 663 positive cash flow on one and 381 on other? any other things you haven't calculated? how much did you put down on each? 20%? 25%?
based on 20% down that is not bad cash on cash return annually at all. looks to be around 17% and 16% based on that percentage down and not including closing costs. 14% is my bare minimum for COC returns. I say hold.
You know your area better than me. That's your playground and if you feel good about the area you should be ok based on your goals. DOn't bother giving me vacancy and maintenance estimates. you should always have 6 months reserves for that for each home anyway to keep you safe. Or you can factor that in if you do not have reserves now. without factoring it in, you are getting around 663 positive cash flow on one and 381 on other? any other things you haven't calculated? how much did you put down on each? 20%? 25%?
based on 20% down that is not bad cash on cash return annually at all. looks to be around 17% and 16% based on that percentage down and not including closing costs. 14% is my bare minimum for COC returns. I say hold.
This post was edited on 6/9/16 at 1:53 pm
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