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200k might be a good down-payment on a home in those cities.
It's easy find a house in Detroit for $200,000. It would most likely not be less than five years old, though. However, if you buy a rental house in Detroit for $200,000, the property taxes and special assessments would be about $11,000 a year. That would put a damper on any return. But, if you don't mind paying about $920/month off the top of whatever rent you can get, don't mind the exorbitant insurance rates, and if you don't mind the risks of being an absentee landlord and having the house stripped, I'd say go for it.
I'm considering going into real estate. If I buy a house worth $200,000 in a large city like Los Angeles, Detroit, or Chicago, percentage-wise what would be considered a good return from the rental payments I'm receiving from that property?
...assuming a 4-bedroom residential house that's less than 5 years old.
If that's the t case why not look buying in Oakland?
I'm considering going into real estate. If I buy a house worth $200,000 in a large city like Los Angeles, Detroit, or Chicago, percentage-wise what would be considered a good return from the rental payments I'm receiving from that property?
...assuming a 4-bedroom residential house that's less than 5 years old.
LOL, you couldn't buy a house in LA for $200k, if you waved a pistol under the sellers nose!
Now, if you were to invest that $200k into 4 houses in Texas, then I'd say you should return about 33% per year...
$200,000 in Los Angeles??? Your buying a ghetto slum teardown!
You need to do some more research and stop following those "get rich quick in real estate" books.
You can get a sfh in Englewood Chicago for 200k. Its one of the most dangerous hoods in the country with zero chance of improvements lol
Nah, just a disciple of Carlton Sheets, Tom Vu, Dave Deldotto or whoever else is the house flip/rental guy on tv at 2am pitching their scheme!
Usually the "landlord" fantasy starts with an inheritance or family loan and then they realize they are in way over their head and one deadbeat tenant breaks the "bank!"
A friend owns 35+ properties in one county. He only pays cash, literally stockpiling the rent money until he has enough to buy another property. He does all the work himself, has had some tenants up to 20 years. Some believe he is the "handyman" but in reality he is the owner!
He just had a deal inked to sell 20 of the homes to an investor group. The price was staggering but the places do make money! The group signed, put down a deposit but then choked when it came down to putting down the 10% escrow. He thinks they were trying to "flip" the deal to a 3rd party.
The poster probably is not in the USA and is wanting a rule of thumb answer. But with real estate taxes varying all over the place even for local owners it’s hard to do that now. Same with insurance due to local weather/environmental risks. An individual investor must look at each property separately to determine if it would be profitable for him.
Nah, just a disciple of Carlton Sheets, Tom Vu, Dave Deldotto or whoever else is the house flip/rental guy on tv at 2am pitching their scheme!
Usually the "landlord" fantasy starts with an inheritance or family loan and then they realize they are in way over their head and one deadbeat tenant breaks the "bank!"
A friend owns 35+ properties in one county. He only pays cash, literally stockpiling the rent money until he has enough to buy another property. He does all the work himself, has had some tenants up to 20 years. Some believe he is the "handyman" but in reality he is the owner!
He just had a deal inked to sell 20 of the homes to an investor group. The price was staggering but the places do make money! The group signed, put down a deposit but then choked when it came down to putting down the 10% escrow. He thinks they were trying to "flip" the deal to a 3rd party.
Nah, just a disciple of Carlton Sheets, Tom Vu, Dave Deldotto or whoever else is the house flip/rental guy on tv at 2am pitching their scheme!
Usually the "landlord" fantasy starts with an inheritance or family loan and then they realize they are in way over their head and one deadbeat tenant breaks the "bank!"
A friend owns 35+ properties in one county. He only pays cash, literally stockpiling the rent money until he has enough to buy another property. He does all the work himself, has had some tenants up to 20 years. Some believe he is the "handyman" but in reality he is the owner!
He just had a deal inked to sell 20 of the homes to an investor group. The price was staggering but the places do make money! The group signed, put down a deposit but then choked when it came down to putting down the 10% escrow. He thinks they were trying to "flip" the deal to a 3rd party.
He moved on, they disappeared.
I love stories like this. Situations where the guy in the denim shirt is the real deal. No shortcuts.
The higher the appreciation of a property, the lower the cash flow. A rental in Columbus, OH will cash flow more than one in San Diego, CA.
Higher cash flow is a risk premium. Another poster said slumlording is the most lucrative but also the riskiest.
If paying cash, you can use cap ratios to get an idea of the risk-cash flow potential of a property. Cap rates can range from the high 3s to the low 7s from what I have seen.
If you are financing a property, you should estimate its value using a discounted cash flow method.
Expect to pay 1% of the purchase price of a property in maintenance every year.
If you buy a rental property in a far off city and have a management company manage it you probably won't ever cash flow. You're just betting on appreciation at that point.
Historically US real estate has appreciated at less than the rate of real growth of the stock market.
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