It did not take me long after closing rental property number 9 to get number 10 under contract! I made an offer on number 10 last Friday, they countered me on Saturday and I accepted their counter on Sunday. I would have told everyone sooner (I actually did if you follow our page on Facebook), but I had a crazy weekend. By crazy I mean laying in bed with food poisoning. I did find a great diet plan; I lost 9 pounds in two days!
Why did I choose a different location for my 10th rental property?
Rental property number 10 is much different from any other rental I have purchased. The house is not in Greeley or Evans (connected towns), but in Kersey, Colorado. I have bought all of my previous rental properties in Greeley or Evans up to this point. Kersey is about 7 miles east of Greeley and a great location for a rental property; at least I think it will be.
Why I chose a small town for a rental property?
Kersey has only a few thousand people and few amenities. I would not normally invest in a small town like Kersey, but Kersey is the epicenter for oil and gas in our area. There is a gas station in Kersey (great burritos) and every time I stop there, that station is full of oil field traffic and oil trucks. Many of the oil fields are East of Greeley and Kersey is the last town for about 40 miles in that direction.
Before I made an offer on this property I checked Craigslist and every rental site I could find for rental properties in Kersey. I found one rental; Craigslist had an ad for a bedroom for rent for $600 a month. That tells me the rental market in Kersey is very tight and I should have no problem renting the house.
The details on my 10th rental property
The first thing that many of my readers will notice is rental number 10 looks old! The home was built in 1950’s which is at least ten years older than my other rentals. I mention in this article why it is smart to try to buy newer rental properties, but I am still buying an older house. I would prefer a newer home, but if the deal is right I will still buy an older rental property. The home has three bedrooms, two baths and about 1,100 square feet total. The home is in very good condition, much like rental property number 9. The home has a newer kitchen, newer baths, newer windows and only needs minor repairs.
Is my 10th rental property still a good deal even though it is in good condition?
I try to buy all of my houses for below market value, but that doesn’t mean they have to need a lot of work. It is more likely to get a great deal on a home that needs work, but sometimes you can get a great deal and buy a home that is in good condition. Much like Greeley, prices have been increasing in Kersey and all the surrounding towns. Getting a decent house for under $100,000 is hard to do anywhere in the area. I think the home is worth 120,000 or more with minimal to no work being done. I was able to get it under contract for much less than that. I won’t give the details until it closes.
How did I get a great deal on this rental property?
The home was listed on a Friday and I went to see it that same day. The property was a fair market listing and I made an offer that same afternoon. Luckily no one else made an offer and the seller countered the offer I made, which was not too far below list price. I was very surprised they did not receive multiple offers on the house because it is a great price. For those of you wondering how exactly a counter offer works, in Colorado the seller can counter and give an expiration date for that counter. The seller actually gave me a couple of days to respond to their counter and as soon as I accept and sign the counter, the home is under contract. However, just because they gave me a few days, does not mean they cannot rescind that offer if something better comes along. It is still important to act quickly.
What will my 10th rental rent for?
This is the big question and I am not sure what the answer is. There are no rentals on the market, but I know there is demand. I know there are other investors buying rentals in the area as well. I have sold a few homes in Kersey to investors who rented them out. I am thinking it will rent for at least $1,100 a month and maybe a little more. We will see what happens and how it works out!
For more information on how to buy the best rentals which will make the most money, check out my book: Build a Rental Property Empire: The no-nonsense book on finding deals, financing the right way, and managing wisely. The book is 374 pages long, comes in paperback or as an eBook and is an Amazon best seller.