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Started By
Message
Purchased first rental
Posted on 8/23/15 at 9:35 am
Posted on 8/23/15 at 9:35 am
Bought my dads place Friday--
5 acres
4/2 20 year old home, 2400 square feet
Metal barn with air conditioned office/craft room
Second barn that needs repair
Taxed with ag exemption because of pecan trees and peas
Paid $92,000 for it. It's in rural east Texas close to canton and I think we will be able to rent it at $1,000.00 a month.
We had it appraised at $135,000 but I know it's only worth what someone will pay for it.
What says the money board--good deal here?
Would you rent and pay back some money on purchase price or flip and sell quickly?
5 acres
4/2 20 year old home, 2400 square feet
Metal barn with air conditioned office/craft room
Second barn that needs repair
Taxed with ag exemption because of pecan trees and peas
Paid $92,000 for it. It's in rural east Texas close to canton and I think we will be able to rent it at $1,000.00 a month.
We had it appraised at $135,000 but I know it's only worth what someone will pay for it.
What says the money board--good deal here?
Would you rent and pay back some money on purchase price or flip and sell quickly?
4
Posted on 8/23/15 at 9:43 am to JoseVargasTX
Personally, I'd rent for a while and see how it goes. So long as you understand the tax benefits of expensing and depreciation, the the fact few real estate people ever explain about these. To wit... to the extent you take depreciation as a deduction to ordinary and rental income, when you sell, you will pay back ordinary income tax on the depreciated amount (generally). In other word with respect to depreciation, sometimes there is no free lunch.
Posted on 8/23/15 at 10:08 am to JoseVargasTX
quote:
Taxed with ag exemption because of pecan trees and peas
what will property taxes be now with the exemption?
quote:
Technically, the Texas exemption for agricultural use is not an exemption. It is actually a county appraisal district’s valuation of the homeowner’s property based on the projected value of what the land will produce. The proper terms for this tax benefit are “Agricultural-Use Valuation” & “Open Space Valuation” although the terms “ag exemption” and “agricultural valuation” are both often used as well. There are two terms because they refer to two separate opportunities for Texas Hill Country Land Owners to lower their taxes by “claiming their Texas Agricultural Exemption” which we just learned isn’t an exemption, but rather an alternative method of land valuation.
LINK
You pay cash? If not how much down?
Insurance? Will you manage it? Never forget vacancies and maintenance.
cash on cash return %? What will your PCF be if it rents for 1k a month?
Posted on 8/23/15 at 6:05 pm to Fat Bastard
Taxes are currently $649 a year.
We paid cash--
We will manage it and are figuring two months vacant just to be conservative.
It has brand new appliances and new carpet. Air conditioner could be an issue and I'm prepared for that.
I own a construction staffing company and employee almost 400 tradesman across the state each day. With these guys, I figure I have the staff to take care of any and all maintenance issues.
Help me on PCF--what does that mean?
We paid cash--
We will manage it and are figuring two months vacant just to be conservative.
It has brand new appliances and new carpet. Air conditioner could be an issue and I'm prepared for that.
I own a construction staffing company and employee almost 400 tradesman across the state each day. With these guys, I figure I have the staff to take care of any and all maintenance issues.
Help me on PCF--what does that mean?
Posted on 8/23/15 at 6:23 pm to JoseVargasTX
Sounds like a great deal to me. You can never go wrong buying dirt in my opinion and it sounds like you got a great price. Good for you.
Posted on 8/23/15 at 7:53 pm to JoseVargasTX
PCF = positive cash flow
Posted on 8/23/15 at 9:43 pm to JoseVargasTX
since it is Ag related I would go to one of the Texas Farm Credit institutions and finance that transaction there.
A quick look shows that Lone Star Ag Credit serves your territory.
A quick look shows that Lone Star Ag Credit serves your territory.
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