On Friday February 14th, 2014 I closed on rental property number 9! I took a video of the home today and you can see it right here; Video of rental property number 9. I bought the home for $134,900 and it should rent for at least $1,300 a month. The home needs very little work and will be a great rental.
For more information on my investing strategy, please check out my complete guide to investing in long-term rentals.
How much did I pay for rental property number 9 and why?
Rental property number nine was listed for $134,900, and I noticed the home within hours of it being listed on the MLS. The most money I had ever previously paid for a rental property was $115,000 for rental property number 6. The reason I was interested in rental property number 9 at a much higher price, was our market has taken off! It has been very difficult finding anything close to my buying criteria. I have been forced to look at higher priced homes and hope the sellers will negotiate more. When I saw this home in person I was very pleasantly surprised by the condition of the home.
Details on rental property number 9
Rental property number 9 is a ranch style home with 4 bedrooms 2 baths and a 2 car attached garage. The great part about the home is it has new windows, nice hardwood floors, a newer kitchen with all appliances, newer bathrooms and very little work needed. Most of my homes require at least $10,000 in repairs and many much more than that. This home should need less than $2,000 in work at the most and be ready to rent. The home has a very open floor plan and one of the bedrooms upstairs is actually two bedrooms that were converted into one.
What will rental property number 9 rent for?
Rental property number 9 should rent for $1,300, although our market is still incredibly tight for rentals. I have heard of people getting crazy amounts for rentals in our area, but I am not getting my hopes up. There is absolutely nothing for rent or for sale in our area, and that has been pushing prices up for both rentals and sales.
Did I still get a good deal on rental property number 9?
I think I still got a great deal on this home, even though it was priced more and I bought it for more than my other rental properties. In the first day they had three offers on the home after I had submitted my offer. I initially offered around $118,000 with the seller paying $2,000 in closing costs. After hearing of the multiple offers I raised my offer to $130,000 and decided not to ask for any seller concessions. The seller ended up countering me at $133,000 and I accepted!
Why did I pay so much more for this rental property?
This home is still a good deal even though I paid more than I have for any other rental. The rents may be similar to my other rental properties, but this home needs virtually no repairs. Having to do minimal repairs gives me a couple of huge advantages over purchasing a home with repairs.
- I don’t have to wait for the repairs to be completed! I have 4 fix and flips and rental property number 8 still being worked on by multiple contractors. Saving time is saving money!
- Even though the home cost more money I am putting less cash into the home, because I pay less money in repairs.
- This home was still purchased below market value. I estimate I could sell it for $150,000 or more with very minimal repairs.
Rental property number 9 gets me closer to 100 properties and I will have news soon on number 10!
We asked $1,400 for rental number 9, and this home also had immediate response and applications submitted. We had to go through a couple of applications on this home as well because the first tenants we decided on flaked out. We also rented this home for $1,400 a month, which is more than I anticipated!