Hi all, first time poster here and I was hoping for some insight/advice.
Our second house on the water was damaged in Hurricane Sandy and we had to demolish it. Now I am rebuilding it (elevated of course) and I am starting to wonder if I should rent it out or sell it. FYI - I will owe nothing on it when its done so any income that is generated from renting it would go back to replenishing the funds. If I rented it, I would expect monthly income to be around $1,500 - $1,750 per month.
My builder who is heavily invested in the area suggests I sell the new construction house on the water and buy 2 houses inland to rent out for approximately the same amount each month. I know it sounds like a no brainer but I have never been a landlord before, and I dont know if I would want to jump into 2 houses right away. Just looking for some feedback or thoughts. Are there any downsides to renting new construction?
Thank you very much
Renting tends to depreciate a home much quicker. In the area where you are building, are there many rental homes? If not, then you may be better off selling and investing in two cheaper rentals (you could effectively double your cash flow).
Another consideration is how are property sales and values? If there are lots of similar homes in this price range for sale, it could be some time to get it sold. Additionally, do professionals in your area expect higher than average price appreciation over the next 3 years? If so, a wait and see attitude could be profitable - but it would be offset with higher re-purchase prices as well.
Sounds like the builder is the big winner in this deal…be careful…being a landlord is not necessarily a promotion.
Personally, I like cheaper and smaller deals that in the even there is a problem, it will not rock my total investment boat.
I like mobile homes on my land…I convert rental homes to owner financing sales and then I am not a landlord…no toilets to fix…then I rent my dirt where the homes sit…you can’t hurt my dirt.
Hope this helps.
Rob