For my Bayonne plan, see 250k 1st buy#YH”hotel”
Guang’s 43 Rockledge house was bought for 512k, but total gross rental is 75k/M or 90k/Y ~ 17% GRY. Most of her 11 rooms collect $800 each. Mine has a slanted ceiling.
(I believe her other unit is 140 Church, bought for 325k in 2013. 10 small rooms, probably similar rental ~ 27% GRY)
Much higher GRY than Youwei’s.
I think such a house is often very old and cheap, so my mtg/tax burden is hopefully lower.
- if GRY high, I can consider a family rental home in a good location, for 2k, and earn a lease spread.
- if GRY high, old house and maintenance cost is tolerable. You can afford to have professional handyman to relieve your pains. Suppose annual repairs costs 10k, you still have 14% GRY.
- Hopefully this becomes a passive income.
- if GRY high, 2.5% tax tolerable
- if GRY high, poor appreciation is tolerable. Guang paid 512k in 2012 but it has depreciated in 2019
- rental income is more important to me than windfall
— to improve profitability
- I would need to avoid a dilapidated house as I can’t afford the risks in renovation
- 2FH is more valuable for this model, but a SFH is more affordable for my first buy (risk-averse .. when unfamiliar,prefer tiny investments,like$200k property)
- find locations with rental demand
- sign 6M leases
- check renter background .. risk@tenant delinquency
- install separate meters
- get professional inspection to identify weak spots in advance and replace/reinforce them.
- agree with tenants that small repairs are their responsibility, given the low rental I charge.
- #1 valuable tip — The more rooms, the higher yield.
- Some renters just need a bed and don’t mind partitions in a living room!
- prefer small living room. It’s completely useless in a hotel model
- small, clean, well-located rooms are very popular with renters. If there is only one big bed room on 3rd floor, you could probably get $1000, but she earns $2000+ with 3 rooms.
- Compare the 2nd floor unit in 40 Wayne. I think total rent is $1k, but it’s big. If divided into 3 rooms it can fetch $2400 !
- prefer 3-storey, often cost the same as 2-storey, but 2 rooms on 3rd storey can generate $1500/M
- You can even divide the basement into rooms if there are bigger windows and stairless back entrance. It would feel like a ground floor.
- attic and basement are very important to this model. They are often ignored (by other buyers) like storage space