I think that's a really good question. I would probably go with the three houses myself, but only if they are still decent houses and if the market is somewhat decent in the area. You have to think -- in a high cost area, you might fetch higher rent, but you'll also have to pay higher taxes on the property, pay higher prices for property management and lawn maintenance, etc.
The more houses the better, considering you can recover them or they are in a good condition and the area is good. Buying in a bad area is terrible because no one will buy that from you at a good price.
Yes... there are some areas near me where the real estate is very reasonably priced (i.e. $100,000 for a house that would have cost us three times that at least in D.C.) and most are in great condition. But then the rental income would be lower... but I think our bottom line decision will probably come down to taxes.
That's what I'm kind of thinking -- more is better. Houses in not-so-good areas can be money makers at times because they are sold so cheap.
Sorry. As for buying the three houses, if they are in an easily rent-able area, I'd go for it, 3 rents instead of one!
Thank you, Gelsemium. Three rental checks, yes... but also three property tax bills. And in the smaller area I'm considering, rent would be about $700 while it's around $2200 in the place our current rental is. So it really does come out pretty close... all except the tax issue.
Don't forget the -handling 3 properties instead of one- factor as well, you're dealing with 3 tenants, have 3 times the risk of something breaking down and having to fix it, all in all it's 3 times the work generally. Remember that renting a house isn't just sitting back and watching those rent checks roll in.
Yeah, that's true, gotta do the maths and don't forget to include work and concerns we have into that equation, some things like our quality of life don't have a price.
Well.... actually that's exactly what it is for us, Strykstar. Our rental is a few states away. The property manager takes care of absolutely everything. If something needs to be repaired or bought new, he subtracts it from the rent check amount and sends the receipts. (After needing approval for the repair or purchase, of course.) We haven't been to the property in 5 years now and the rent checks are always on time because they come from the manager and not directly the tenant. Even if it would be 2 or 3 houses closer to here instead of one in the same high priced area, there would be a property manager doing the same.
I'm sorry, Peninha... I'd answer this but I don't understand what it means. I agree that quality of life doesn't always have a price, but I'm not catching how that fits into this conversation. Maybe I'm just slow today.
