Home Buying in 75023>Question Details

Rafi Malkhsi…, Home Buyer in Plano, TX

I'm looking to put 50K in investment. Thinking about getting some rental property in range of 100K-150K, is this a good investment?

Asked by Rafi Malkhsian, Plano, TX Tue Oct 4, 2011

For example for 150,000 looks like interest/prinicpal/insurance/warranty sums up to 850 per month considering my down pay. How about property management? how much it usually costs? also is renting 150K property for 1300-1500 a month realistic?

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14
Rafi


investment properties require 20% down payment
so you can buy a good 3 bed 2 bath Property to lease out for about $1400 to $1600 a month
Property Management charge 9% of monthly Rent

let me know if you need help
thanks
John Hamidi
Keller William Realty
3600 preston rd Ste 100
Plano TX 75093
phone : 469-252-4661
website : http://www.johnhamidi.kwrealty.com

Mobile URL http://app.kw.com/KW171KAK
ACCESS CODE KW171KAK
0 votes Thank Flag Link Fri Sep 13, 2013
Sounds like you are right on track.
Property management is typically 10%/month.
You also need to factor vacancy rate and rental charge.

I always think you want to do your best to keep rental rates about $1200/month range.
So buying a little cheaper may help depending on what part of town you want to buy.

We're investors ourselves and very picky about what types of homes we recommend for our clients.
Call me if you would like to discuss more about your strategy. Rental market is strong right now.
Web Reference: http://www.teamlynn.com
0 votes Thank Flag Link Wed Oct 5, 2011
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
Contact
Happy to assist you with your real estate investment . Recommend to use our consulting services 1st to understand all involved purchasing a real estate as an investment. I owned investment properties AND worked with investors world wide you can make wrong decisions which can cost you!

Lynn911 Dallas Realtor & Consultant, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes Thank Flag Link Wed Oct 5, 2011
I would say all depending on many factors...If 150K house, if your credit history is good, you can down 10%, 20%, 25% etc.. In some case, investors might down 100% if they think the property is Worthy.

Whether or not it is a "Good Investment", I would say all depending on many factors: location, value of the house, condition of the house, maintenant fees, rental price, good/bad tenants etc...

I have helped investors to buy, sell, lease commercial as well as residential properties.
If you need my help, my email address is twong@txdfwhome.com


Thank you.
Ultra Real Estate Service
0 votes Thank Flag Link Wed Oct 5, 2011
Rafi, property management company usually charges 10% of monthly lease, and as a realtor and an investor I highly recommend the service of a property manager. What I have seen too many times is that there are frictions between landlord and tenant, and having a property manager helps. For 10% a month, it is well worth the price and it can save you from a lot of headaches.

Renting has been really hot but depending upon the area that you are planing to purchase the monthly lease varies. I'd be more than happy to show you what the lease price is for the different areas and assist you with costs associated with leasing. Bare in mind that if you want to lease your property and decide that you'll work with a realtor to market the property, the fee is usually 100% of first month rent. This service is beneficial to you since the realtor will not only market your property but she will check the tenant's credit, give you advice, and write the lease contract. If this is your first time trying to get into investment property I highly recommend the service of a realtor and property management company. Let me know if I can be of any help.

Susie Kay, GRI, CHMS, SFR
Realtor®
Residential/Commercial/Investment
English-Indonesian-Hokkien
---------------------------------------------------
Keller Williams Realty
4783 Preston Road
469-371-2899

Servicing your real estate need is my priority!
0 votes Thank Flag Link Wed Oct 5, 2011
Rafi,

Great strategy. The profile of who is spending money in today's ecomony has changed dramatically over the last 24-36 months. And this will likely continue. With the current levels of uncertainty, lack of confidence and constantly changing regulations and guidelines, the rental market is growing rapidly. Our landlord/tenant business has doubled in the last twelve months and we have even created our own Leasing and Property Management Division. So your thinking is right on target.

My advice and counsel to you is to determine 3 things...

1. Cash flow ROI - After buying costs, holding costs and debt service, what % of annualized return do you want to realize on each investment?
2. Exit strategy - How will you determine if and when to divest yourself of a certain asset?
3. Cap rate - What is the profit margin you want to achieve when you divest an asset?

It is much easier to find a property that will achieve these goals for you than to try and make your goals fit the property. The property is a secondary consideration because as an investor, you are not buying property...you are buying cash flow.

Of course there are many other factors involved. But starting with a well thought out strategy as to how to maximize your investment capabilities will make your investing do what you want it to do for you.

I hope this helps a little bit. Plesae feel free to ask any additional questions. Or contact me direclty if you like. Thanks for using Trulia Voices.

Alan Wynn - Branch Manager
Coldwell Banker Residential Brokerage
Preston Campbell Regional Office
972.931.2400 (office)
214.729.5582 (cell / text)
Alan.Wynn@cbdfw.com
Web Reference: http://cbdfw.com/alanwynn
0 votes Thank Flag Link Wed Oct 5, 2011
Rafi,

Great strategy. The profile of who is spending money in today's ecomony has changed dramatically over the last 24-36 months. And this will likely continue. With the current levels of uncertainty, lack of confidence and constantly changing regulations and guidelines, the rental market is growing rapidly. Our landlord/tenant business has doubled in the last twelve months and we have even created our own Leasing and Property Management Division. So your thinking is right on target.

My advice and counsel to you is to determine 3 things...

1. Cash flow ROI - After buying costs, holding costs and debt service, what % of annualized return do you want to realize on each investment?
2. Exit strategy - How will you determine if and when to divest yourself of a certain asset?
3. Cap rate - What is the profit margin you want to achieve when you divest an asset?

It is much easier to find a property that will achieve these goals for you than to try and make your goals fit the property. The property is a secondary consideration because as an investor, you are not buying property...you are buying cash flow.

Of course there are many other factors involved. But starting with a well thought out strategy as to how to maximize your investment capabilities will make your investing do what you want it to do for you.

I hope this helps a little bit. Plesae feel free to ask any additional questions. Or contact me direclty if you like. Thanks for using Trulia Voices.

Alan Wynn - Branch Manager
Coldwell Banker Residential Brokerage
Preston Campbell Regional Office
972.931.2400 (office)
214.729.5582 (cell / text)
Alan.Wynn@cbdfw.com
Web Reference: http://cbdfw.com/alanwynn
0 votes Thank Flag Link Wed Oct 5, 2011
In addition to the answers below you also want to know the ROI (return on investment) of your property. The rent depends on the area you buy in - both Friso & Plano get pretty high rent and the range you mention is right on target. In addition to property management (usually about 10%), you need to consider how you are going to market the property. If you hire a realtor the charge is usually the first months rent, but this gets it into the MLS for you and the agent will show the home, collect applications, arrange credit checks on prospective tenants and write the contract for you. If you would like to discuss this further I would be happy to be of assistance.
Web Reference: http://www.lindalorenzo.com
0 votes Thank Flag Link Wed Oct 5, 2011
It can be a good investment, as long as you buy right. Make sure to find a real estate agent to work with that can help you out on picking locations and homes that are good long-term investments. If you are looking in that price range, you will likely see some 'fixer-uppers'. Make sure you know what kind of repairs will be needed and be particularly aware of any foundation problems there may be. A good home inspection is invaluable when shopping for any home and especially investment properties.

Doubtful you will get that kind of monthly rent for a house in that price range. Also, remember that your rental income margins may be lower in TX than some other states due to the higher property taxes here.

John Safstrom
Systematic Home Inspections
214-600-4344
0 votes Thank Flag Link Tue Oct 4, 2011
Yes, I've rented out a home for one of my investor groups at $1600 per month that was purchased for $135,000. We put about 8k into it.
I'm happy to help! There are some properties that can be purchased as investment with just 10% down rather than the 20% usually required.

Cheryl -
cherylcory@ebby.com
0 votes Thank Flag Link Tue Oct 4, 2011
Rafi,

If it's your first time investing, I would suggest starting with low price homes in the range of 70-80k. As an investor however, you would need to put down at least 20-25%. This would get you two rental properties. 1300-1500 is too much for most tenants to pay. Please see below for answers to your questions.

For example for 150,000 looks like interest/prinicpal/insurance/warranty sums up to 850 per month considering my down pay. I am assuming that the monthly payment is with 25% down payment? If so, I would think.

How about property management? Most of the times you would be charged 6-10% of each month’s rent.

also is renting 150K property for 1300-1500 a month realistic? It would really depend on what other houses in the neighborhood are leasing for. :-)



If you have any questions at all please feel free to call or email, I'm standing by to assist you.

Sara Neek
Texas REALTORs Leadership Program
VIP Realty
3010 LBJ Freeway
Suite 1200
Dallas, TX 75234
214-298-4800 Office
214-443-1212 Cell
sara@dfw-housesforsale.com
dfw-housesforsale.com
0 votes Thank Flag Link Tue Oct 4, 2011
Rafi,
You will want to check the rental comps in the area that you want to buy, to ensure that the rental rates will cover your expenses plus provide a positive cash flow. Additionally, if you hire a property manager they will charge approximately 8% per month. You will also want to have reserves available for any needed repairs while the home tenant occupied or after move-out.

There is no cost to you to have a Realtor represent you when you are buying a home...and with all of the items to consider with the purchase, it would be HIGHLY recommended. Find a local real estate agent that is knowledgable and competent that you can trust to look out for YOUR best interests. Hire them to help you. It will be worth it.

If you would like to speak with me about representation, please let me know. I live in Plano and specialize in the Collin County area. My business partner is an Accredited Buyer Representative, and we would love to assist you.

Melissa Hailey
Coldwell Banker Jane Henry Realtors
North Texas Top Team, Realtors
214-418-0180
Melissa.Hailey@ColdwellBanker.com
0 votes Thank Flag Link Tue Oct 4, 2011
Real Estate is a good investment source (IMHO). Give me a shout: tadlock11@hotmail.com
0 votes Thank Flag Link Tue Oct 4, 2011
hello Rafi,
I think what you are trying to accomplish is quite realistic. I work with investors and would love to talk to you further. To hire a property manager, I would think is feasable after you own a couple of rentals. Please call me at 972-814-0155 so we can discuss.

Maria
0 votes Thank Flag Link Tue Oct 4, 2011
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