All neighborhoods have a range of rents for both apartments and houses. In my Class C hoods, due to inflation mainly, SFH rents are now ranging from $750 - $1,000/month.

What are the current market rents for SFH in your Class C hoods ?

Class C is defined here as most residents having working class or hourly paid type jobs.

Homer,

I can't imagine paying more than $20,000 for any house in Class C hood. I also can't imagine paying more $500/year in property taxes for a C house. My C hood houses would sell today at $80-$120K.

I don’t have any houses in class C areas but the range is really wide probably because the homes are expensive.

The rents on homes will not cash flow just about anywhere and they haven’t for years.

On one side of a multifamily that I own the owner asked if I want to buy his house for 400K. It needs everything done. On the other side a fully updated house is on the market for 750K. That’s high but the current buyers paid that much around 18 months back. The market is weaker now. I’m sure it was purchased by people who don’t know the market. The rental market for that house is around $3000.

So the range for class C areas is wide

400K in not very good areas to

750K in better neighborhoods

Rents $2300-3500

My market is still about the same as your in terms of both rents and sale prices for Class C.

A $1700 rent is sub-optimal for a $249K unit. That hits the 0.68% Rule. Consider selling via 1031 and exchanging into something that would fetch better ROI. My guess is, done properly, you could double that level of cash flow.

No available houses for sale here right now would cash flow as LTRs, and that's been true for 3-4 years now. We bought our last few places in 2021 and there's been NOTHING since.

Housing prices went way up, prospect's income did not.

Nice houses here now rent for $2800-$3500.

We are staying under $2k for our places in order to be sure to keep our funnel full. Go up $100 and valid inquiries drop fast, go up $200 and it becomes impossible to find good tenants who can actually afford the rent.

Sid,

My cost basis on that 3/2/1 house in the B hood is $170,000 but it currently rents for $1,700/month. That tenant is moving out soon and I may test the rent waters at $2,000/month. That would be a new rent record for me.

2 bed 1 bath $895-$995 about $60k purchase and rehab

3 bed 1 bath $1195 about $75-$80k purchase and rehab

Hey Otis,

Are your Class C rental houses bare bones (no frills) or do they have modern amenities like Central Heat and Air?

My last sale in the hood was C/D class in 2022. Rented $1100/mo sold for 260k.

There are no class C neighborhoods. An older, plain 2 bedroom apartment is about $1200. A newer small apartment is about $1600, Houses start at $2100, but don't go up more than a couple hundred above that.

Oregon,

Ken,

Hey Roy. My class C houses are a mix. If it has central heat and air, dishwasher, etc I leave it that way. If not then central heat (except for 1 that has electric base board), window unit AC, no dishwasher or garbage disposal. They all seem to rent just as easy.

Thanks Otis.

Baseboard heat is code here, Ken. The original "zoned" heat source. :)