Quote:
Originally Posted by mudman
Jurgen, do you have any math/data that says a $15k house rented for $650/mo is less profitable than a $60k house rented for $750/mo? I won't expect the cheap property to appreciate and there will be more 'maintenance', but is that better than having $45k more into a house? There is some crazy upside potential in some properties around here, but they take more cash up front and we don't make much %wise until we sell, which all depends on things I can't predict.
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Rhetorical question it is?
Ask yourself this: If a person can afford $750/mo, would they choose the $60k in a presumably better neighborhood or the $650/mth property in a lower-end area? Your clientele will suffer if you carry the cheaper property, and it will cost you more dollars. Of course, your debt load is many times less (profits should be UP), so you have to ask yourself, "How many dolllars do I need to put up with the BS?" The answer to that question is purely subjective.
I hold the more expensive properties myself. I'm not arguing they are better. I still get some sucky tenants, but guarantee I put up with far less BS than the guy similar rent for a crapbox in the hood. I'm a passive person. I don't like to fight, so I have to pay more up front to hit that cash flow target. Different folks for different strokes. best luck to you, jurgen