I would agree with all of the postings, it is great that you came here for advice. Location (ease of renting the unit) and your cash flow will typically drive the decision of the rental property more than anything. It would in the end come back to your rental game plan more than anything else. Some people buy rental properties to gain equity over the long run for retirement and worry less about the interim cash flows. Others buy rentals to gain the positive cash flow per month so they do not worry as much with the price as long as the rental streams offset the debt (mortgage, taxes and insurance). Just keep in mind that a 2 bedroom will typically not sell as easily as a 3 bedroom when you are ready to get out. I hope that helps, best of luck on your decision. Jeff Lesley 910-297-7071, JLesley@Century21Sweyer.com
I purchased a 2BR/2BA in 2003 before I had a real estate license. Wish I had an agent at the time advise me to go with a 3 bedroom as it is much easier to rent and for a higher amount.
The purchase is a townhome in Hearthside near the hospital and verizon wireless. So far finding renters has been without problem, but I do have the rent about $50.00 per month below market value so I can pick from a bunch of prospects rather than taking the first one that comes through.
With income levels pretty low in Wilmington, you need to be careful to be in a neighborhood that attracts the income levels that you will need to meet your financial objectives.
The below web reference is link to financial calculators that I make available to the public. Scroll down below the search are and click on discounted cash flow calculator. This will calculate the Net Present Value (NPV) which is one of the considerations on making a purchase decision. I also have some advanced spreadsheets, but they cannot be used on a forum as they are in excel.
3 Bedrooms are always more rentable and more valuable. Just make sure the HOA dues are reasonable. Often times it's the HOA dues that make an investment property go from a positive cash flow to negative. However, as important as cash flow is to the investment, there are other factors that make for an attractive return on your money.
Feel free to contact me and I'll be happy to discuss investment properties with you.
Best property would always be a 3 bedroom, 2 bath because this opens your options for different kinds of renters...however...location is also very important always in real estate....so biggest is not always better....so you need to look at price, location , condition and then if you could move to larger...to do it! Let me know if I can help!
In buying a foreclosure it has been my experience that you may have to put more money into it to make it rentable.
Prices are lower on a foreclosure but if you have to invest in appliances, lighting fixtures and repairs to bring it up to market value it may be worthy to look at all options.
A 3 bedroom, 3 bath has better statistics in rentability in Wilmington due to the college set. We have some lovely areas available. If you need more information please feel free to contact me
Best of luck
Broker . REALTOR
Intracoastal Realty Corporation
residential . commercial
Normally you should be able to attract more renters and gain more rent from the 3 bedroom property. As it has been said many times, location, location, location. If you are looking near UNCW the 3 bedroom property will draw students who will like the space. When you look at your own finances make sure it makes since. There are a lot of properties available, you might find that the best value will turn out not to be a foreclosure, nor a short sale. Call if I can help!
Run the numbers. If you have any plans to leverage into more properties, the 2BR may be the route to take as this will keep your overhead lower. My website http://www.LasVegasRealEstateConnection.com has a lot of useful information for investors. Under the ABOUT US sublink is a copy of my resume if you and your colleges are in need of a good, experienced, agent. Thanks for writing in.
As far as short term equity is concerned, you stand to make more in a short period of time on the foreclosure, typically. However, from a rental standpoint, you will be able to rent the 3 bedroom at a higher rate than the 2. If you could get the 3 for a decent price, then I say go for it. Hope this helps and best of luck. Andrew Kelly 910.231.2337