Going from 17% to 34% CoC ROI - Am I missing something?
A rental property I bought last year and just getting refinanced. Here are the numbers for before and after. If I am to remove the vacacy and maintenance factor (considering the lease is for 2 years and I have a home warranty that the tenant pays deductible for - the ROI shoots up to 45%)
| Initial Purchase | Post Refinance | ||
| Purchase Price | $ 105,000 | Appraised For | $ 144,000 |
| Paid at Settlement | $ 34,000 | Cash Out | $ 26,060 |
| Updates | $ 9,000 | ||
| Total Cash Investment | $ 43,000 | Post Refi Cash Investment | $ 16,940 |
| Rent | $ 1,450 | Rent | $ 1,450 |
| PITI | $ 600 | PITI | $ 741 |
| HOA | $ 35 | HOA | $ 35 |
| Vacancy and Maintenance | $ 145 | Vacancy and Maintenance | $ 145 |
| Expenses | $ 780 | Expenses | $ 921 |
| Monthly Cash Flow | $ 670 | Monthly Cash Flow | $ 529 |
| Yearly CF | $ 8,040 | Yearly CF | $ 6,350 |
| Less Home Warranty | $ 529 | Less Home Warranty | $ 529 |
| NET Yearly Cash Flow | $ 7,511 | NET Yearly Cash Flow | $ 5,821 |
| CoC ROI | 17% | CoC ROI | 34% |
| |
Am I missing something here? Would you say this is an exception or typically achievable? With these kind of returns who needs to invest in stock market! (I understand diversification)