Can this be right? (lease, rental property, foreclosed, analysis)

[Momma_bear]

We have been looking into buying a rental property in the Fort Lauderdale area. The rental market here is strong. All those people who have been foreclosed need to live SOMEWHERE so they rent.

I saw a duplex listed at $42K. According to the listing the two units (each 2BR) are currently rented for a total of $2,200 per month. It's not in the best neighborhood, but it's not in the worst neighborhood either. It's less than half an hour drive from where I live.

If it's rented 10 out of 12 months I can collect $22,000 cash. Taxes will be around $1,000 per year. Insurance around $2,000.

I have been a landlord before. I realize it's a PITA. I know there are costs when stuff breaks but I have good contacts in the community for reasonably priced tradespeople. Plus I am a SAHP of kids who are in school all day.

This seems like a very good deal. Am I missing something? Please bring me back to earth.

[ShaneSA]

What is the current condition? Does it need work? How much work? Will it imcrease in value as time goes on or will it need alot of work to keep in shape or improve? Why is it not rented 12 of 12 months? Would a one year lease make it rented all year?
Why is it only 42K?

[tworent]

42k for both sides or one side

[Momma_bear]

Originally Posted by ShaneSA

What is the current condition? Does it need work? How much work? Will it imcrease in value as time goes on or will it need alot of work to keep in shape or improve? Why is it not rented 12 of 12 months? Would a one year lease make it rented all year?
Why is it only 42K?

I don't know about the current condition. I haven't gone to see the property. I would need a crystal ball to know whether it will increase in value. It's not in the best neighborhood, but it's not in a scary bad neighborhood either.

The ad stated that it was rented and listed the rents for both units.

When I do my analysis of whether I can make money on a property I assume it will be rented 10 out of 12 months because there is always the chance that it will be vacant every now and then. I assume it is actually rented for 12 months.

Your last question is my question. Why is it only $42K? Even if it needs a lot of work I can still make money on a property like this. Is this also a by product of the poor market? If so, I may need to buy rental property. NOW.

[Momma_bear]

Originally Posted by tworent

42k for both sides or one side

I assume both sides since rent for both sides was listed in the ad.