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My husband and I are looking into buying a rental property in Henderson or Durham. In both of these cities there are a plethora of homes under 30k. I fully understand this is because they are not in the best area however has anyone had any success buying one of these homes and renting it. I've found two specific homes I am interested in located in Henderson. One is off of Gary Street it's a 1950's with 870sqf for $17,900 and the other is off High Daniel its a 1940's 600sqf bungalow for $19,000. If anyone knows anything about these areas or has had any luck with purchasing a home like this and renting it please let me know. Or let me know if you have tried this and it turned out to be a nightmare.
Just a word of caution, I would be extremely hesitant with pursuing these properties. We have a Prop Mgmt business and I can tell you that just from what you have written you may have issues with not only the properties but the tenant situation could become a nightmare (primarily in what the target market would be). Best of luck to you.
If you know what you're doing, these can be seen as great opportunities. However, there's probably a reason why these properties are priced at 30k and as they say, "you get what you pay for." Just because these properties are cheap does not mean that they are a good value.
Something else to think about, is how you plan to manage these properties. If you don't live in Henderson or Durham, are you prepared to make that drive each time your tenant reports a maintenance issue, or you have to perform yard maintenance, lawn mowing, replanting, etc. What about when you need to go collect rent?
Something else to think about, is how you plan to manage these properties. If you don't live in Henderson or Durham, are you prepared to make that drive each time your tenant reports a maintenance issue, or you have to perform yard maintenance, lawn mowing, replanting, etc. What about when you need to go collect rent?
That's why we have property maintenance companies that handle all these things.
That's why we have property maintenance companies that handle all these things.
Oh? I'd love to know the name of one of those "property maintenance companies that handle all these things" and what they might typically charge for a house like the one on Gary St.
There are several of them. As someone searching for rentals, I have amassed quite the laundry list. Off the top of my head:
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I have no idea how much they charge for their services. This would apply to Durham, but I'm pretty sure they take properties in other surrounding cities too. (I wasn't sure if the Gary St. was in Durham or Henderson since they are in both cities.)
Last edited by SunnyKayak; 11-13-2008 at 09:58 PM..
Reason: no individual realtor links
As someone who has and still is playing the landlord game I'll offer some advice. I can tell you with 100% certainty, that unless you are spineless, ruthless and don't let things bother you, do not buy a property in that low price range. Your tenants will have 75% default rate, tear the property apart, use it for illegal activity, (prostitution, gang activity, drug dealing) and will likely not pay more then 2-3 consecutive months of rent. The credit check, background check will not apply in this market area. Sure, you can demand it, but if you do, you won't find renters. About the most you could ask for is "Do you have a job?"
I have found that until you bump into about the $85,000 condo market in the triangle area, you are not going to find decent tenants. And even in this price range, you are taking a big risk. If you drive through the areas you mentioned offering houses for under $30,000 it's rough. Every man, women and child for himself applies in these areas. I would suggest instead of buying two low end properties, combining those funds and buying once decent one. You will be able to screen tenants, use background checks and so on.
PS. Where are you finding these homes? I see nothing in the MLS in either area for that price range?
Last edited by CarolinaCowboy; 11-13-2008 at 08:50 PM..
PS. Where are you finding these homes? I see nothing in the MLS in either area for that price range?
They're listed in the trianglemls and accessible through realtor-dot-you know , CC.
Mia, a property management company usually charges a certain percentage of gross rents.
Properties that are in the price range mentioned by the OP don't fall in the high-end of rents in our area, and typically have the problems that PP have mentioned, so not many property managers will want to take it on (without charging correspondingly hefty fees). Even doing the management oneself, it'll be tough to turn a profit, and when you factor in what an investor pays out to a property manager ... well, you get the picture.
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, CC.
