We have an appointment on Friday to actually go in and look at the condo that we are thinking of purchasing for the purpose of renting it out. I've done the math using all different types of scenarios. The sellers are asking $74,000 for it. We would only be able to purchase it if we could get it for the low to mid $60's. That's probably a bit of a stretch but it has been empty for almost a year and had one sale fall through.
Costs:
$125 Loan Application
$300 Home Inspection
$3000 Closing Costs
$13,000 Down Payment
Total up front costs: $16,425
Eeeek! Seeing that number makes me want to puke. I really want to move forward with this but I have a huge fear of investing that much money all at one time. What if we can't rent it or what if we can't rent it for as much as I am hoping we can?! But then part of me keeps thinking, you have to spend money to make money and it is an investment. It's not like we are just throwing that money away. We live in a really nice city in a great location. I've looked at other townhouses that are for rent in the area to get an idea of what we could get for rent. I hate to not at least try to purchase this condo just because I'm afraid of the what ifs.
Anyways, we haven't even looked at the unit yet so I'm getting way ahead of myself but I've seen pictures of the inside and it is nicer than most of the condo's I've seen for sale. It was remodeled as the Show Condo and right after they finished remodeling someone made an offer on it because they liked all of the work done on it.
I've been calculating our return on investment for different scenarios...Tomorrow I'll post a bad case scenario, an OK scenario and what I hope will be the actual scenario and what our projected return on investment will be for each.
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