Eastwood Oaks - Home For Sale/Rent

[Scharpe St Guy]

Hello Everyone,

**First off if this topic should be placed in the classifieds instead of The East End then moderator please move and my apologies.**

Approx three years ago I once owned the following home, did some improvements and sold to a real estate investor. This investor has asked me to either find a new renter or sell the home as he is frequently over seas.

So for your review, comments, suggestions, information, etc... I present 5006 Curtin St located in Eastwood Oaks.

Sqft 1119

Lot Size 5770

2 Bedroom, 1 Bath, 1 Car Garage, extensive updates such as new HVAC, built ins, bathroom, kitchen, etc...

Rent $850 / Sale "Asking" Price ~$120,000

This property is not yet listed on MLS/HAR as I am having new carpet and misc repairs done after tenant moved out. If you are interested in this home please contact me through PM.

Thank you,

Scharpe St Guy

Curtin Pictures

[west20th]

Hello Everyone,

**First off if this topic should be placed in the classifieds instead of The East End then moderator please move and my apologies.**

Approx three years ago I once owned the following home, did some improvements and sold to a real estate investor. This investor has asked me to either find a new renter or sell the home as he is frequently over seas.

So for your review, comments, suggestions, information, etc... I present 5006 Curtin St located in Eastwood Oaks.

Sqft 1119

Lot Size 5770

2 Bedroom, 1 Bath, 1 Car Garage, extensive updates such as new HVAC, built ins, bathroom, kitchen, etc...

Rent $850 / Sale "Asking" Price ~$120,000

This property is not yet listed on MLS/HAR as I am having new carpet and misc repairs done after tenant moved out. If you are interested in this home please contact me through PM.

Thank you,

Scharpe St Guy

Curtin Pictures

Sure your not selling yourself short on the rent? I've got a rental worth about 100K and it gets 1K per month (950 if the check is mailed before the 1st). It's location is near 6 and Westheimer which, I would think, isn't as desirable as the East End. It is a bit bigger but it doesn't have the upgrades yours has, it is straight out of the '80's. Also, it's a townhouse, small patio and no yard.

Does anyone out there know if there is a rule of thumb on what the rent should be based on a percentage of the properties worth?

[Scharpe St Guy]

To be honest with you the owner was happy with $850 as long as they are good tenents. I wanted to place this on HAIF first and if no takers then onto MLS for a little more money. Rentals are doing pretty well right now in present market conditions.

Thanks,

Scharpe St Guy

Sure your not selling yourself short on the rent? I've got a rental worth about 100K and it gets 1K per month (950 if the check is mailed before the 1st). It's location is near 6 and Westheimer which, I would think, isn't as desirable as the East End. It is a bit bigger but it doesn't have the upgrades yours has, it is straight out of the '80's. Also, it's a townhouse, small patio and no yard.

Does anyone out there know if there is a rule of thumb on what the rent should be based on a percentage of the properties worth?

[spiderman]

Sure your not selling yourself short on the rent? I've got a rental worth about 100K and it gets 1K per month (950 if the check is mailed before the 1st). It's location is near 6 and Westheimer which, I would think, isn't as desirable as the East End. It is a bit bigger but it doesn't have the upgrades yours has, it is straight out of the '80's. Also, it's a townhouse, small patio and no yard.

Does anyone out there know if there is a rule of thumb on what the rent should be based on a percentage of the properties worth?

A rough rule of thumb for Houston that I have heard is that the monthly rent should be 1.2% of the purchase price in order to break even - this includes allowing a reserve for capital improvements, vacancy, make ready costs, etc., in addition to interest, insurance, and taxes. For example, an investor would pay $84,000 for a house that rents for $1,000 per month. ($1,000/0.012 = $84,000).

[OldHouseLover]

A rough rule of thumb for Houston that I have heard is that the monthly rent should be 1.2% of the purchase price in order to break even - this includes allowing a reserve for capital improvements, vacancy, make ready costs, etc., in addition to interest, insurance, and taxes. For example, an investor would pay $84,000 for a house that rents for $1,000 per month. ($1,000/0.012 = $84,000).

THANKS Sharp St Guy & Spiderman for discussion comparing value/price paid to monthly rental. Wonder what Harris County Appraisal District uses for income vs value for their appraisals?

[jm1fd]

THANKS Sharp St Guy & Spiderman for discussion comparing value/price paid to monthly rental. Wonder what Harris County Appraisal District uses for income vs value for their appraisals?

They could give two hoots in hell about the income the property generates. They look at what nearby properties SELL for.

[VicMan]

The property is zoned to, in HISD:

* Cage ES

* Jackson MS

* Austin HS

[jdbaker]

They could give two hoots in hell about the income the property generates. They look at what nearby properties SELL for.

That's not true, at least for commercial properties. They will use "income approach" appraisal methodology where appropriate.

[OldHouseLover]

That's not true, at least for commercial properties. They will use "income approach" appraisal methodology where appropriate.

Thanks everyone! Have 2 rentals that would never rent for 1.2% of the value HCAD is placing on them. WOW! I can only imagine putting out my hand to collect rents @ 1.2% of HCAD valuation. Maybe I should switch from residential to commercial rental as tenants in commercial handle upkeep, most maintenance & finish to suit their business needs.

[jm1fd]

That's not true, at least for commercial properties. They will use "income approach" appraisal methodology where appropriate.

So do you know if they do it for residential properties too? That's what we're talking about here....

[TAK]

So do you know if they do it for residential properties too? That's what we're talking about here....

They absolutely do not.

Residential and commercial properties are WAAAAY different.

Residential properties are valued based on comparable selling homes - because there are many of them and they tend to be fairly uniform.

Commercial properties are valued based on income, because the actual building is generally unique, and therefore, not extremely valuable, except for the commercial purpose it serves.

A real estate investor will look to buy a rental property at a price that will lead to positive cash flow after all expenses. There are various theories and formulas:

I've heard this one a lot in Houston:

monthly rent 850 / .012 = 70,833 purchase price

or, the one based on the national average of rental expenses:

50% of monthly rent will be expenses (on average), so buy low enough to cover expenses and generate cash flow, in this case:

Gross Rent $850 / .02 = $42,500 purchase price

Obviously, the bottom deal is very difficult to find. On the flip side, I would never pay $120k for something that rents at $850. Some people would say, "well, you can raise the rents" or "well, it will appreciate." A good investor will say, "apparently, i cannot raise the rents because they are not raised" and "it won't appreciate much, if any."

Someone will probably buy it at $120k, but not a serious investor. This place is "functionally obsolete" as a house, so it may only be good for a rental (not meaning someone can't buy it as a house, but most people would not.)

Good luck.

[OldHouseLover]

They absolutely do not.

Residential and commercial properties are WAAAAY different.

Residential properties are valued based on comparable selling homes - because there are many of them and they tend to be fairly uniform.

Commercial properties are valued based on income, because the actual building is generally unique, and therefore, not extremely valuable, except for the commercial purpose it serves.

A real estate investor will look to buy a rental property at a price that will lead to positive cash flow after all expenses. There are various theories and formulas:

I've heard this one a lot in Houston:

monthly rent 850 / .012 = 70,833 purchase price

or, the one based on the national average of rental expenses:

50% of monthly rent will be expenses (on average), so buy low enough to cover expenses and generate cash flow, in this case:

Gross Rent $850 / .02 = $42,500 purchase price

Obviously, the bottom deal is very difficult to find. On the flip side, I would never pay $120k for something that rents at $850. Some people would say, "well, you can raise the rents" or "well, it will appreciate." A good investor will say, "apparently, i cannot raise the rents because they are not raised" and "it won't appreciate much, if any."

Someone will probably buy it at $120k, but not a serious investor. This place is "functionally obsolete" as a house, so it may only be good for a rental (not meaning someone can't buy it as a house, but most people would not.)

Good luck.

Great information! I just realized I have a "functionally obsolete house" . Should have sold it yrs ago as family recommended! Vlue seems to be going down instead of up. Time to sell! I appreciate the insight.