$100k Rental property investment- where to buy in US?

[Maverick1963]

I am giving my thoughts to buying a rental property to get some additional income. The budget is $100k. Would you give me advice on which state, city and even area I should consider.

 

[DeniseM]

$100K is not very much to buy property in the US. The median home price in the US is $223,900. I can't imagine the difficulty of trying to manage the property long distance. I don't think a property in that price range is going to attract the quality of renter that you want, either. Frankly, I don't think this is likely to be a successful idea.

 

[bogey21]

Buy near your home. I have a friend in Las Vegas who owns 5 rental properties. All are in walking distance from his home. He takes a walk every morning and makes sure to walk by and check out every one of his properties.

George

 

[Passepartout]

What Denise said, and to add to that, ANY investment should be in something YOU understand. You should know the risks, the rewards, the market and who your potential 'customer' is. Absent that, perhaps pooling your $100K with others in a managed group of Real Estate holdings in a Real Estate Investment Trust.

Jim

 

[Brett]

What Denise said, and to add to that, ANY investment should be in something YOU understand. You should know the risks, the rewards, the market and who your potential 'customer' is. Absent that, perhaps pooling your $100K with others in a managed group of Real Estate holdings in a Real Estate Investment Trust.

Jim

that's my real estate investment strategy (diversified REITs) but I know others that have done well with rental properties, you've just got to have the knowledge and strong stomach for being a landlord

 

[am1]

Close by or a place where you visit a lot that is somewhat close or you may want to move to. But yes a 100k is a pretty small budget.

 

[DeniseM]

Based on the OP's profile, he lives in Japan.

 

[Maverick1963]

Thanks for your input. I understand all you said. I have a one bedroom condo as investment in Hawaii. So I know a little bit about being a remote landlord. Also I have a very reliable agent/management company there and I have not had any bad experiences in the past five years. I understand risks and the current cycle is for selling not for buying. And I know my budget is small. However, I believe there are opportunities and I may want to get prepared for a very near future. Having said that, if someone should have any opinion and advice, I would appreciate them very much.

 

[Patri]

Thanks for your input. I understand all you said. I have a one bedroom condo as investment in Hawaii. So I know a little bit about being a remote landlord. Also I have a very reliable agent/management company there and I have not had any bad experiences in the past five years. I understand risks and the current cycle is for selling not for buying. And I know my budget is small. However, I believe there are opportunities and I may want to get prepared for a very near future. Having said that, if someone should have any opinion and advice, I would appreciate them very much.

You already got worthwhile opinions and advice. $100K won't buy much, and an agent would take up the bulk of your income. What is your cushion for maintenance expenses?

 

[Marathoner]

You could buy a parking spot in Brooklyn, NY for 100k. The return on investment would be ok. The demand would be higher in Manhattan but the cost would be much greater than 100k.

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[VacationForever]

I think if you increase your budget to the 250K-300K range, you may find a decent 2 bedrooms with a 1 or possible 2 bathrooms home as a decent rental property. Property prices have increased in the past 2 decades and you won't find anything for 100K in decent living condition that can be used as a rental.

 

[bizaro86]

I live in Canada, and have purchased rental condos recently for not too much more than 100k USD.

If I was looking in the US, I would look for places that have landlord friendly legislation and strong economic growth, or at the very least a stable economic base. I think I'd start my search in Austin, TX. Other places I think have potential are the Carolinas, and college towns in the Midwest and south.

 

[klpca]

I spoke to a woman who bought a parking place in Honolulu that was paying a pretty good rent. Not sure what the up front cost is, though.

Personally I would probably wait a bit. Real estate is wonky right now - seems to be in flux.

 

[mbofnard]

I live in Canada, and have purchased rental condos recently for not too much more than 100k USD.

And where did you buy in Canada?



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[bizaro86]

And where did you buy in Canada?



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All my rentals are in the Calgary metro area. Population just slightly over 1 MM. Economy has shrunk recently due to lower oil/gas prices, but is starting to rebound off a lower base. Real estate prices here are much lower than Vancouver/Toronto.

 

[Maverick1963]

Texsas is a hot real estate market. It may be too hot now. I have not thought about Canada while I may wish to keep doing tax return only in US. Parking lot is intersting. It is a possible option. Would anyone has opinion about Memphis?

 

[easyrider]

With $100,000 a person can borrow anywhere from an additional $100,000 to $900,000 with a mortgage loan. With $100,000 a person can usually buy on contract an investment property from a property owner.

Biggerpockets.com is a good place to find the answer to real estate investing. However , if the op is looking to buy timeshares and start a rental company renting out timeshare weeks, $100,000 would buy many good timeshare properties that rent for 30% - 50% over the maintenance fee.

Bill

 

[tompalm]

I agree with easy rider. Take out a loan and shoot for a $300,000 property in a state that has nice homes in that price range. Some states like Texas and Tennessee have high property tax because there is no income tax or the state income tax is low. I like Oregon, Florida, Arizona and others like Austin Texas. But we found property in Austin had a 3 percent property tax when city tax is added to the state tax. Vegas has great deals on homes, but there are a lot of rentals on the market and the income is not as high. Also, potential growth might not be as high because they never recovered from the 2008 property values. In 2010 we bought a house for $180,000 that sold for $440,000 in 2007. Today that house is selling for $270,000 and rental prices have not gone up in nine years.

 

[WVBaker]

So much will depend on the type of property your looking to invest in. Condos can be quite different than a single family detached.

 

[VacationForever]

With $100,000 a person can borrow anywhere from an additional $100,000 to $900,000 with a mortgage loan. With $100,000 a person can usually buy on contract an investment property from a property owner.

Biggerpockets.com is a good place to find the answer to real estate investing. However , if the op is looking to buy timeshares and start a rental company renting out timeshare weeks, $100,000 would buy many good timeshare properties that rent for 30% - 50% over the maintenance fee.

Bill

Foreigners cannot get a loan without credit history.

 

[easyrider]

Foreigners cannot get a loan without credit history.

Sure they can. Many investment properties are sold on private contracts with a large down payment. The tax benefit to the seller is often the motivation.

The roi on a single family home is not really all that good. Multi-family has a far better roi, imo.

Real estate crowd funding has recently become kind of popular with people that are looking for passive income of 6% - 11% per year with very little effort.

Bill

 

[DazedandConfused]

Thanks for your input. I understand all you said. I have a one bedroom condo as investment in Hawaii. So I know a little bit about being a remote landlord. Also I have a very reliable agent/management company there and I have not had any bad experiences in the past five years. I understand risks and the current cycle is for selling not for buying. And I know my budget is small. However, I believe there are opportunities and I may want to get prepared for a very near future. Having said that, if someone should have any opinion and advice, I would appreciate them very much.

If your investment in Hawaii is going well, then I would double-down and buy a second property there and use the same management company. Why start over with someplace new if the current property is doing well.

 

[Big Matt]

I've been doing it for a while so I can give you some things to consider. Never buy a condo as an investment property unless the margins are great. You can get killed with assessments. Buy single family homes with no HOA dues. Buy the smallest house you can buy in an area with high rent demand. People generally would rather have a small house than a small apartment. As others have said, buy in an area you know very, very well and as close to home as possible. Find a painter, handy man, HVAC, and plumber that you trust. Use a property management company so that they deal with the hassles, take care of the legal documents, and get tenants in the property. Don't ever buy a rental property with a pool. Don't buy properties with garages if you don't have to (just more maintenance). Also, if the tenants are handy, let them paint, fix stuff, etc. Just give them a break on rent. Keeping people in the properties long term avoids leasing costs, and long term tenants take care of the place like it is their house. You also have to be very picky and wait until you can buy under the market. Treat the investment as a bond and understand that the value is tied to net rents and not what other properties would sell for.

I spent a total of $203,000 on my three properties combined and put about $20,000 of improvements into them. I owe nothing on them and get $2550 in gross rents a month and yield about $1800-2000 per month after the property management fee, insurance, taxes, and maintenance (grass cutting, HVAC maintenance, and stuff like fixing appliances.

One last suggestion. Get in touch with a property manager. They will know if any investors what to sell, and often you can buy a property with a tenant in it.

 

[Ken555]

Real estate crowd funding has recently become kind of popular with people that are looking for passive income of 6% - 11% per year with very little effort.

I’ve seen a number of ads for these opportunities, and explored some of the web sites promoting them. It’s an interesting concept, and while I haven’t looked into any in detail the general takeaway I have is not positive. I’m not convinced it’s better than simply buying a REIT, even if it earns a higher percentage, given the implicit higher risk. Again, I haven’t looked into it too much...but it is interesting and appealing, if it can be trusted to perform.


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[TravelTime]

I agree with easy rider. Take out a loan and shoot for a $300,000 property in a state that has nice homes in that price range. Some states like Texas and Tennessee have high property tax because there is no income tax or the state income tax is low. I like Oregon, Florida, Arizona and others like Austin Texas. But we found property in Austin had a 3 percent property tax when city tax is added to the state tax. Vegas has great deals on homes, but there are a lot of rentals on the market and the income is not as high. Also, potential growth might not be as high because they never recovered from the 2008 property values. In 2010 we bought a house for $180,000 that sold for $440,000 in 2007. Today that house is selling for $270,000 and rental prices have not gone up in nine years.

Was that in Las Vegas? Did prices peak in 2017?