What would you do if you were me?

I'm thinking about buying a rental house and I have about $95,000 in stocks. If I cashed them out I would have to Pay long term Capitol gains on about $25,000.

I would be buying the house for about 295,000$ and put $100,000 down and rent the house out for about $1,600 per month.

The property taxes would be about $3,100 per year.

Small 3 bedroom house in suburb of Portland Oregon

2 Answers

  • 12 months ago

    That's a hefty price property for that monthly rent. Are you sure you want to tie up your funds like that?

    Your stocks should be doubling every 7-8 years. You aren't going to get that kind of return on the property.

    Let's pretend everything stays stagnant - with the rental, it's going to take you 30+ years to see a profit:

    Average maintenance is 1% of home value or $3000 in your case.

    Then you have $3100 in taxes.

    Then periodic repairs = $1000 a year.

    You brought in $19200 (hopefully), shelled out a minimum of $7100 leaving $12100 and this doesn't include your mortgage, insurance, etc, which means you will likely be breaking even ($200K loan for 30y at 4.6%= $12221)

    The only way you are going to make money is if the property increases in value.

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  • 12 months ago

    It takes a weird person to be a landlord (like me). You cannot let it get to you if your tenants trash the house, don't pay rent etc. You also have to do a lot of maintenance and repairs or your contractors' costs will eat your profit up. You have taxes, insurance, maintenance, repairs, upgrading and vacancy factors. If you have a mortgage, don't even think you are going to be getting money back out of the rental until that is paid off.

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