Hey there, folks! So, I stumbled upon this awesome thread and decided to throw in my two cents. Here’s the scoop: I’ve got this sweet 3-bed, 2-bath pad in a town of around 150k people, part of a metro area totaling about 300k folks. Currently, this gem is rented out for $2,850 to a fantastic tenant who’s been chilling there for a good while and is keen on buying the place.
I’ve had this property for some years now, lived in it myself, and can vouch that it’s in tip-top shape. It’s a 1950s beauty that got a complete makeover before I snagged it – new everything inside, fresh windows, appliances, updated electricals, plumbing, roof, you name it. The only thing that’s not fresh as a daisy is the HVAC unit, with the indoor part cruising at around 10 years old. It’s a single-story ranch-style setup with brick walls, tile floors, and basically low-maintenance all around.
Let’s crunch some numbers: Rent brings in $2,850, property taxes and insurance gobble up $531 monthly, and I’m managing it solo, so zero bucks on that front. Vacancy has been zilch thanks to my stellar tenant, and I reckon I’m pricing it a smidge under market value. I stash away $200 monthly for maintenance but only dipped into $300 over two years.
I’m currently looking at a high 5s interest rate and chipping away at around $400 monthly on the principal. Cashflow-wise, I’ve been raking in $405 per month, but with the maintenance fund set aside, it’s a cool $200. If I were to hire a property manager, my cashflow would dwindle to nada. With 5% down, I’m sitting on about $22k in equity, but if I bumped that up to 20%, I’d be pocketing an extra $300 monthly.
Now, here’s the kicker: my tenant is eyeing the property for keepsies, looking to settle in long-term, lock in their payments, build equity, and shave off their monthly expenses. If they decide to keep renting, I wouldn’t even be tossing this question out there. But they want to buy, and I’d be walking away with a sweet $51k post-sale. No agents involved, just a good ol’ title