How much can you rent a brand new two bedroom in lakeview for? (real estate, apartments)

[lincolnparker]

Me and a business partner want to purchase a few 2/2 new construction in lakeview and rent them out. They are selling in the 450k ish. We are thinking long term. how much do y'all think we can rent each one for? $2000? $2500? realistic in this market?

[Avengerfire]

I would not pay more than 325k for one of those.

[JanuaryGirl]

Are you kidding me? How on earth do you think anyone here can give you an estimate based on that info alone?

[Drover]

Why not just scan some rental ads?

[Damage Control Freak]

Originally Posted by lincolnparker

Me and a business partner want to purchase a few 2/2 new construction in lakeview and rent them out. They are selling in the 450k ish. We are thinking long term. how much do y'all think we can rent each one for? $2000? $2500? realistic in this market?

It's a legitimate question, however the thing you should be able to calculate for yourself is how much you would NEED to rent it out for to make it a good investment. Than you can check the market if that's a realistic price. I'd guess you would need at least $2500/mo at this price and I doubt you'll get that much.

[Mamama Mia]

Before opening your thread, my guess was about $2,500.00. I know what my kids have paid for apartments that have not been rehabbed, so that seems like a reasonable amount to expect in rent.
Best of luck!

[coldwine]

In the first place, you're going to have to analyze cost.

Property taxes spread out over twelve months, plus the association fees, plus other utilities/maintenance and the like will give you a base to start with. Often times, that base can be quite high, starting as high as $1,000/month in frequent rentals.

Other times, that base can be quite low-- if property taxes are low, perhaps it's only $500/month at cost.

Remember too, unless you're paying for these in cash you have to cover the costs of your monthly mortgage payments. So you are not likely to be making money off these rental units until possibly as many as ten years down the road, unless you intend to use them as speculative units (which in this case would be hideously stupid).

And that's how you come to a number to determine whether or not you can afford to rent at market prices What are market prices? Open the "real estate section" of any newspaper and find out.

My disclaimer is that this IS NOT professional advice. Get an accountant and talk to a real estate agent.

[grapico]

isn't it going to be pretty street by street, even in lakeview? Closer to the el, closer to the lake, etc....

I'd say u def have to do your research first and figure out what your initial costs are going to be, like other users have said, then base the rent on that.

I would be very careful though I know several people who have lost their asses, trying to do the same thing you are, for lack of a more specific term in this very volatile market. These people seemed to be much more knowledgeable about the market than you too. Good luck, but be careful.

[lincolnparker]

Thank you all for chipping in. The purpose of posting in this forum is really trying to get some advice from practitioners instead of an accountant who may or may not have a real estate biz.

I have run the numbers for first year of a new construction here:

In 2009, a typical 2/2 new construciton in lakeview (walk up or low rise with no doorman) purchased for $450k with 20% down and 5.25% interest will have:

Monthly mortgage (30 yr): $1987
assessment: $250
tax: 0
maintenance: $100
total: about $2350

Mortgage interest tax deduction (assuming 30% tax bracket): 600
2009 tax credit for buying a property as a first time home buyer (have not purchased a home for past 3 yrs): 700
Total: 1300

So the total cash outflow for first yr is only 1050 per month. Am I misssing anything here?

[Drover]

How do you figure zero for taxes? That especially doesn't make sense when you're also taking a deduction on the other side of the ledger. Plus it appears you're treating the deduction as a dollar-for-dollar credit rather than a deduction.