I’ve mentioned briefly in some of my monthly updates about looking for a third rental property this year. I actually have been looking at a few properties each week. There was a property I was interested in two weeks ago but the property received multiple offers on the first day it was listed. Needless to say, I didn’t have a chance on that one. Yes, the market here is really hot. Austin isn’t the fasting growing city in the country for nothing. Technically, this property isn’t in Austin but it’s just twenty minutes outside of the city. It’s still a fast growing area.
So last Friday I found another property I liked and made an offer right away. I actually offered $200 over ask since I knew the housing inventory is low and there are lots of buyers. There were other offers on the property but I found out Monday that my offer was accepted.
The house is fairly new (built in 2002) and has had some recent updates including what looks like a new deck and iron/wood fence in the back and laminate flooring inside. It also has privacy since it’s basically in a cul-de-sac and backs up to a field.
Here’s the numbers:
Single-Family Home (built 2002)
3 beds/ 2 bath
1260 sq ft.
Purchase Price: $136,200
Down Payment: $34,050 (25%)
Interest Rate (4.75%/30-year fixed, but I’m still shopping)
HOA – $0
P&I – $532.86
Property Taxes – $254
Insurance – $68.10 (estimate)
Maintenance/Vacancy Costs (15%):
Free Cash Flow:
ROI (includes 3% closing costs but not maintenance/vacancy):
ROI (includes 3% closing costs plus 15% maintenance/vacancy):
So these numbers aren’t too bad if I can get at least $1300 for rent. The good thing is that the house is practically move-in ready. It needs one move-out cleaning, and a small update in the bathroom. The shower doors are broken, so i’ll need to source some frameless shower doors from somewhere to fit the room. Shouldn’t be too hard, and considering some of the projects i’ve had i’m okay with two quick fixes to carry out compared to a full fixer-upper situation. Plus the previous owner is leaving the washer/dryer plus fridge which are all still in great condition. I don’t see myself having trouble renting this place quickly. I will look to close by the end of March if all goes well including inspection and appraisal.
My plan is still to have half my investments in equities and the other half in real estate. One of my goals this year was to add a third rental. I will be sure and post more updates as they happen.