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How Would You As A Landlord View This?


               
2010 May 26, 3:55am   2,739 views  7 comments

by OnTheFence   follow (0)  

Hi,

Vain brought up a home in a very rough part of town. In an effort not to hijack his thread I posted this.

http://sfbay.craigslist.org/sfc/reb/1759471287.html

The home is now set to go to auction for $99K.

Me not being experienced in real estate, never owning a home, have a couple of questions to those that are experienced.

Q: Why would this NOT be a good target for cash positive rental opportunity?

Q: How would putting Section 8 tenants in this home change the economics (how does this even work)

My inexperience leads me to believe that this represents a good opportunity to buy this home and rent it out as a solid long term investment.

My thinking is as follows

- Cash buy $100K
- Rent $1,500 (possibly more depending on section 8?)
- Annual Taxes: $1,200 (1.2%)
- Annual Repair: $3,000 (seems high to me)
- Annual Rental Income: $18,000
- Home Insurance: $3,000 (total guess)
- Net Return on 100K: 10.8%

Please fill in where I'm missing something.

Thanks

#housing

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6   vain   @   2010 May 26, 7:10am  

I don't think this would be a good landlord's property. The cashflow would be positive, provided that the tenants even will pay up :) Just not worth the time. You might also risk your safety going to the property to work on it. This is by the far the worst part of town.

I say we just merge both threads. That's why I posted it anyways - for discussion.

7   OnTheFence   @   2010 May 26, 11:55am  

Is there some way to promote a commenter Patrick? If so, I'd like to give SF ace a gold star.

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