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What all do you guys look for when buying a rental property? Can someone share an example of a rental property they bought with considerations that went in?

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Sure. I'm buying a rental property in Detroit right now. Quantitatively, I looked for a low entry point (under $100K), a cap rate over 7%, and a CoC over 10%. Qualitatively, I looked for C or B neighborhood, a house with minimal repair needed (mostly cosmetics), and a management company with fees at or under 10%. I picked Detroit because of the high rent-to-home value ratio, the potential for growth, and positive city development trends. This is my first property. Eventually, I'll get familiar with all of the material specifics and start looking for specific types of utility systems/flooring/spacing/etc, but right now I don't have that knowledge, so I'm mostly doing things on paper. Hope that helps!

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^^ if only all posts on here were of the same quality.

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^that, or buying in places that have taken longer to recover and still have attractive price points/good upside. Like Detroit ;)

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I bought a condo in chicago in 2013 for 80k. It rents now for $1,100. The 1% rule comes to mind, the monthly rent should be one months rent at a minimum. But these days it is difficult to find properties that fit this rule in major metropolitan areas. The condo I bought at 80k just appraised for 135k barely 4 years later. So if you're looking now just know that you'll be buying at close to the top of the market in most desireable areas of the country.

One way you can get around this is by buying a place that nobody will touch, but it'll take some sweat to get it fixed up, not sure if you're looking for something like that but it may be the only option.

But ultimately you're right. The RE market has had a crazy runup since 2012

Do you guys live close to the area you buy? If not how do u manage? (Did you visit early on?)

Rule of thumb - you SHOULD live close to what you buy...unless you use turnkey. Less profits, but less risk as well. That's what I did for my Detroit place, because that place is so fickle. I needed local expertise

@a1 can you please share a burner? I'd love to get your take on Detroit (I am looking to invest within the next 6 months)

Definitely. Feel free to hit me up at hoffmandify@gmail.

@a1 I sent an email to your burner, not sure if you've seen it?

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