Buying Rental Real Estate Cheap
By Steve Gillman - 2008
Is buying rental real estate cheap still possible? It always
has been, as the following examples from around the country will
show. But be sure that they still produce positive cash flow.
Also, this is not a sale's guide. It is meant only to show you
some of what was out there as of mid-to-late 2008. These are
properties I found listed in a real estate guide that covered
more than a dozen states. (See the 2011 note at bottom too.)
Fort Smith, Arkansas - $54,900 for a duplex that is totally
remodeled inside and out (it looks really nice in the photo).
New paint, carpet, cabinets and more. In a good central location.
I don't know what the typical monthly rent is in Fort Smith,
but it seems it would be hard to lose on this.
Paragould, Arkansas - $32,500 for a three-bedroom house with
vinyl siding. Has "wonderful cash flow," and large
Alturas, California - $255,000 for a historic two-story hotel
that has been used as a residence. There are 10 bedrooms and
4 full bathrooms. This could be a real money-maker as a bed-and-breakfast
or a boarding house.
Salina, Kansas - $80,000 buys an eight-unit apartment building
on a large lot in town. Four 2-bedroom apartments and four 1-bedroom
units. I don't know what the rental situation is here, but buying
rental real estate for $10,000 per unit isn't common. I imagine
if you had 50% vacancy you could still make money with this one.
Dexter, Missouri - $61,500 buys you a duplex in town with
off-street parking. This one also comes with possible seller
Glendive, Montana - $90,000 for a four-unit apartment building,
two with two bedrooms and two units with just one bedroom each.
Off-street parking and all are currently rented.
Shelby, Montana - $60,000 gets you an apartment building with
four two-bedroom units. May need some work, but it looks decent
in the photo.
Hugo, Oklahoma - $150,000 for an eight-unit apartment complex.
Four have one bedroom, and four have two. Lots of parking and
tenants pay utilities. Brick buildings with patios off of all
Gilmer, Texas - $65,000 for a house currently split into three
separate units, each currently rented. Seller financing possible.
I don't know what the numbers are for the investments mentioned
here. This was just some of what I found in ONE real estate guide
(published by UnitedCountry.com) in 2008. It does suggest that
buying rental real estate at a reasonable price is possible in
many areas of the country.
2011 Update: Prices have fallen much further in many
areas. In particular, condos have fallen dramatically in areas
where they were overbuilt during the boom years. We recently
looked at condos in Florida that are selling for 25% of what
they sold for just five years ago. Yes, you read that right -
their market value has tumbled 75%. Rents have not gone down
much, and are even rising in many locales, so if you can find
condo complexes that allow renters, there may be some great deals
available at the moment.