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/biz/ - Business & Finance

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1165277 No.1165277 [Reply] [Original] [archived.moe]

So... i live in a townhouse. Rents for $670 a month. There are 64 units like it, on one little road that's about 200 yards long.

They were built 40 years ago, and the owners are paying one lady, and one maintenance man to run the whole place. I'd be amazed if they brought home $50k combined.

So I'm assuming the townhomes have long been paid off and are just generating pure income at this point.

Would it be safe to say that each unit is generating $500 profit monthly? If that is correct the owners are bringing in $32k in rents per month.

Would anyone venture to guess how much it costs to develop a similar townhome complex as these? Because there is some land left in my town that would make a good spot for something like this, and unless my calculations are wildly flawed it seems like building some townhomes could be wildly profitable.

>> No.1165356


You're forgetting about property taxes.

But yes, there's a reason why so many landlords are jews.

>> No.1165455

True, i did forget those, but in my area property taxes for residential real estate is almost negligible.

A $250k house would pay less than $1k annually

>> No.1165472

is this an ant eater?

>> No.1165524

Built 40 years ago suggests the could be paid off. Given property taxes are really only a small fraction of a mortgage payment, they're just jews because they can be.

>> No.1165642


> wildly profitable

they certainly can be. And it sounds like they are in this case.

The key issue with renting out units, is problem tenants.

> don't pay
> commit crimes
> disappear
> mess up the unit

If you can avoid the above, then yeah business is good.

>> No.1166197

>Would it be safe to say that each unit is generating $500 profit monthly?
>unless my calculations are wildly flawed
They are.

>> No.1166202

I built a quadraplex. First the contractor went over $80,000 (family friend I've known for years), 2nd the bank delayed the extra loan for 6 months, all the while my units sit empty, I lose the rent plus paying $1,500+/month interest, 3rd some faggots stole all my appliances.

All of that being said, I'm selling them, and I'll still make close to $60,000 in profit. Next time I'm buying existing units or houses to rent out.

>> No.1166262

Property taxes, you dumb idiot.

Take the midwest. $100,000 trap house, rents out for $1,000/month. Property taxes take up $200/month, misc. maintenance will average $50-100/month. Property management fee is 10% of gross ($100/month). You're down to 60% of gross receipts, and that's if everything goes smoothly and you're not counting the opportunity cost ($100,000 sunk could easily return 3-5% in low-risk investments - count as $250-400/month).

It's still a good yield, if you're doing about 8% net before income taxes. Just not as amazing as you children think. An REIT just might beat out a paid-in-full rental.

Even if they're grossing $32k/month, it's probably worth $3.6M if sold. 10% return, perhaps 8-9% after property taxes. They'd be much better off selling and buying $10M of quality rental properties with 20% down.

>> No.1166427


Gg anon.

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