The bidding continues: 45-day countdown, day 13

Meanwhile, as if I didn’t have enough to do running around saving trees, we are still bidding on potential rental property.

I saw three houses yesterday. I visited House #9 a second time, and also saw two new ones. I’m going to call them House #11 & #12, although I think I’ve actually seen more than that.

House #11 is in great shape! The conventional wisdom when buying rentals is that you should buy something in less-than-perfect shape, because you can negotiate a low price and then fix it up as needed. That is true in some markets and in some situations. It’s not as true for us.

 

For one thing, it happens that in our area, the cost of fixing up a property is quite high compared to the low cost of purchasing already updated property. Secondly, John and I would prefer to use our 1031 pre-tax money, rather than out-of-pocket post-tax money. So it makes more sense for us to pay for the upgrades in the sales price, rather than doing them ourselves later. Plus, we’re already in middle of a remodel on our own house!

 

The problem is, everyone else wants those perfect-looking houses too! There was a bidding war on the first house we tried to buy, House #7, and we didn’t bid high enough. It was too far over our budget.

House #11 is in a good school district on a nice, quiet, well-maintained street.

 

The only downside is it’s an attached property.

 

In the old days, I’d call it a duplex, but they don’t seem to call them that anymore. They also used to sell the two sides of a duplex at the same time as one building, but nowadays they sell the units individually like condos or townhomes. Maybe that’s why they’re calling it a townhome.  I’d love to buy both halves, but the other half isn’t for sale, and I’m not in a position to buy yet another rental right now anyway.  So half a duplex it is. (It’s the one on the left.)

 

This one has nicer materials than House #9; granite counter tops and modern tile in the kitchen and bathrooms.

It also has a gorgeous backyard. Nice backyards are hard to keep up in rentals, and some landlords opt for low-maintenance rock gardens and hardscape (paved patios, etc.)  But I’m a sucker for a beautiful yard. It just means that I’ll need to put some language in the lease about garden upkeep. Also I will have to be out there on a regular basis, checking up on it. There is a drip system, which will help. And that bright green spot of lawn is actually artificial turf.