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Started By
Message
Buy, sell or hold?
Posted on 6/8/16 at 2:32 pm
Posted on 6/8/16 at 2:32 pm
I bought this 1,972 square foot townhouse in Franklin, TN for $231,500 in December 2016 as a rental. Price per square foot was ~117/foot and the average for Franklin is closer to ~$131/foot so I jumped on it.
It needed to be cleaned up with a fresh coat of paint in the whole thing and then I fixed a few plumbing issues and changed out some old fans, light fixtures, and mirrors. It was in good condition but dirty. It's essentially a brand new place now. I have it rented out for $1895/month (I know it's not the 1% cap rate rule).
Anyway, this is a pretty nice townhome and there is literally nothing under $300k that is this nice in Franklin. Another unit just sold for $275k after being on the market for 1 day. I have it rented for the next 8 months and was able to rent it on the first showing. it's close to my house and pretty much hassle free. I don't need the money from potentially selling it for anything right now so I am inclined to just keep renting it. When I bought it, I personally thought that these could go for $275k. In a few years in Franklin, these can go for $299k pretty easily assuming the market doesn't crash again (it really didn't in Williamson County - Franklin & Brentwood in 2009).
It needed to be cleaned up with a fresh coat of paint in the whole thing and then I fixed a few plumbing issues and changed out some old fans, light fixtures, and mirrors. It was in good condition but dirty. It's essentially a brand new place now. I have it rented out for $1895/month (I know it's not the 1% cap rate rule).
Anyway, this is a pretty nice townhome and there is literally nothing under $300k that is this nice in Franklin. Another unit just sold for $275k after being on the market for 1 day. I have it rented for the next 8 months and was able to rent it on the first showing. it's close to my house and pretty much hassle free. I don't need the money from potentially selling it for anything right now so I am inclined to just keep renting it. When I bought it, I personally thought that these could go for $275k. In a few years in Franklin, these can go for $299k pretty easily assuming the market doesn't crash again (it really didn't in Williamson County - Franklin & Brentwood in 2009).
This post was edited on 6/8/16 at 2:38 pm
4
Posted on 6/8/16 at 3:41 pm to Serraneaux
Hold.
Posted on 6/8/16 at 4:21 pm to Serraneaux
My hood....hold. That area doesn't follow the rules of the market. ;)
Posted on 6/8/16 at 5:28 pm to PurpleNGoldFan
The amount of growth that is going on in Nashville right now is insane. I am thankful I bought my current house in 2010.
Posted on 6/9/16 at 8:47 am to Serraneaux
What are your goals? passive income? flip for capital appreciation? Do you want to be a landlord who makes fat stacks? or a flipper who makes fat stacks? or neither?
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
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
Posted on 6/9/16 at 2:39 pm to Serraneaux
quote:
I bought this 1,972 square foot townhouse in Franklin, TN for $231,500 in December 2016
Time travel? Cool trick.
Posted on 6/9/16 at 3:46 pm to lnomm34
Sorry. 2015.
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