I started reading books on buying and managing rental properties in my third year of college. I’ve always wanted to pull the trigger on buying a rental, but to this point I never have. Maybe it’s about time for that to change. Maybe this will be the year that I start my rental empire, first a townhouse in Monaca, next it’ll be Villa Bellissima Cabo! Hey, a guy can dream!
Since I have found myself thinking about buying a rental again, I was naturally drawn in that direction when looking for a house to profile for this weekend’s real estate article. As luck would have it, I’m not sure I could have possibly found a better potential rental property than 1008 Elm Street, Monaca.
This awesome little house would make a great option for a young single professional or a couple looking for a great place to start their life together. It is in a perfect location and is packed with lots of recent improvements.
The Numbers
- Asking Price: $74,900
- Square Footage: 1,056 sq ft
- Price/Square Foot: $70.93
- Lot Size: 2,614 sq ft
- Bedrooms: 2
- Bathrooms: 1
Location, Location, Location
If you’ve ever lived in Monaca, then you already know that one of the biggest advantages of this house is that it is close to just about everything. There are tons of shopping and dining options close by, and you can jump on 376 or 65 and be in Pittsburgh in 45 minutes.
Since Monaca is right in the heart of Beaver County, this house is also close to just about every place that Your Beaver County has covered. It is also located in Central Valley School District.
Inside the House
1008 Elm Street is located right off of 14th Street Hill in Monaca Heights, and many of the important aspects of the house have already been updated. That means it is pretty much move-in ready for your tenants.
The most obvious improvements that have been made are the new carpet and pergo floors throughout the house. There are also new windows and a recently updated furnace and air conditioning unit.
Running the Numbers
The thing that makes this house really exciting is when you sit down to run the numbers.
With an asking price of $75,000, let’s say you make an offer at $70,000. Since this is going to be a rental, you’ll have to put 20% down. After that $14,000 down payment, you’ll be financing the remaining $56,000 at something like 4%.
Over a 30 year fixed mortgage, that works out to a principal and interest payment of $267/month. Factor in about $100/month each for taxes and insurance, and you are looking at a monthly nut of $467 to crack.
If a two bedroom house in Monaca Heights generally rents for $600-900/month, even if you go conservative and rent it for $600/month you will have a positive cashflow of $133/month from day one.
What’s the Worst That Could Happen?
The kicker that really sweetens this deal for me is the worst case scenario. Even if I couldn’t find a tenant for an entire year (which is ridiculously conservative), I could just make the payment of $467 per month, which is actually lower than my car payment.
At that price, this house would be the equivalent in monthly cost of upgrading from my Ford Fusion to that Lexus I keep looking at. The difference is that 20 years from now the house will be worth even more and the Lexus will be worth nothing.
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