No. of Recommendations: 1
I'm looking into buying my first rental property and just thought I'd post here. With interest rates so low, I've just refinanced my house into a 10 year loan and took out $40,000 of equity. At < 3% interest (and tax deductible) it felt like a no brainer.

Initially I was just planning on investing the money in stocks, but for a long time I've been interested in purchasing a rental property. This seemed like the perfect opportunity.

I'm looking at a duplex less than a mile from my house selling for $70k. It's an older neighborhood in a decent suburb. Taxes are $4200 a year.

One of the units is currently rented for $600 a month. The other is a bit smaller and upstairs but it should be able to rent for $500 a month.

I plan to do all the maintenance myself, which should help my profit picture. There are a few exceptions such as the furnace and things that need to be done ASAP.

Any thoughts? I still need to more precisely work out the numbers, but back of the envelope calculations seem encouraging. I don't want to plan for any price appreciation, so this has to be profitable over time just through increased equity and positive cashflow eventually.
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.