Burlington Investment Property (real estate, rental, condo)

[otterhere]

Am considering purchasing a condo in the Hill/UVM district, preferably a historic building, to rent out to students during the school year and occupy myself summers and during Christmas breaks for now and possibly live in full time later. I understand the rental return can be very good if a bargain can be found. Sound feasible?

[Logs and Dogs]

At the 100,000 foot level, sure conceptually is it feasible.......there is a heck of a lot of leg work, luck, planning and $ that needs to align correctly to make that a reality. And then there is the reality of being a landlord to drunk destructive kids in a building you have to maintain.

I've run the numbers for several successful projects for people and the key for making the numbers work was to maximize the number of units and bedrooms......in other words, it is hard to make things work with a 2-3 family unless you really buy correctly and keep your rehab costs down. Look for a cap rate of 10% as a barometer of what a commercial property is really worth. For example.......say your rental income will gross $2000/mo for simple math....$24,000/yr.....assume like 80% occupancy (or lower depending on student lease terms).....so really $19,200/yr at 80%.......if you apy more than $192K, you better have a good plan to increase rental income etc. or plan on some other justification for carrying the property other than making money......

Research commerical real estate, cap rates etc.