Are townhomes good investment properties? I found one on a foreclosure site for 22,000. the comps in the area states that the other units are selling for 37,000 - 39,000.
All real estate can be a good investment. But you have to post the numbers for us to help you analize it. Verified rent amount primarily.
It sounds like a good deal to me…56% loan to value. What more do you want? lol
Unless it needs a boatload of repairs of course.
Plus, you should make an offer at 90% of the listing price.
I think townhomes are great investments. I currently have 2 and am actively looking for more. However, just like any other RE investment, the devil is in the details. The property must cash flow as a rental or have real profit potential as a flip.
I like townhomes because they are usually simple in construction, center units have limited windows and exposed area, they hold their value better than condos and appreciate about the same rate as SFHs (at least in my area) and they rent at about the same rate as a SFH while costing less (aagain, in my area) Tenants lik them since they are 2 steps up from apartments and have little in the way of external upkeep or yardwork.
I wish I could purchase at $22k… the last one I bought I got at $105K, put $15K into, and rent out at $1500/month for about a 9% COC return after expenses.
jmd_forest
I just bought my 2nd townhome. I think they’re great, especially if you’re starting out because there is less to rehab/maintain. I’ll never have to landscape, paint or re-side the exterior, replace a roof, or reseal a driveway.
Just make sure you know the HOA fees and figure them into your cashflow. They can be a cashflow killer. And if you get one and start rehabbing, plan early anything that the HOA might have to approve, like decks, front door changes, or window replacement. They usually want everything to look the same and can take a month to approve it, depending on when the meetings take place.
I replaced a deck and wanted to use composite decking. I went to the HOA meeting with a sample and passed it around like it was a tupperware party. They all touched it and rubbed the texture and looked impressed then said “Thats great. Just paint the bottom of the decking so it looks the same as the other decks from the sidewalk.” :doh