Rental Property Investor · Muncie IN · Member since 2015 · 68 posts · 25 votes
5y
@Paul Christian Mendoza your numbers look a little low. P&I will be $100, tax and insurance will run another $100. I plan $50 for repairs. Then you need to think about vacancy, uncollectible and capex. Vac/Uncol at 10% and capex of $100 has you at expenses of $425. Property management will run another 10% if you don't manage yourself. All added up you're at $500 minimum, giving you about $200-300 profit. I'm questioning what you're going to get for 10-30k and whether 10k in repairs will be enough. I typically look for 3/1 SFH but a 2/1 would run more like 30-50k from what I've seen.
@Roger Pokorny so my wonders are that I’m looking to purchase, 2 bd 1 bth homes because the average market for rentals in Muncie seem to be at 700 to 800, those 2 be 1 bth are selling for 15k to 30k. On a 25% down I'm looking to have a mortgage and escrow of about 120 which would leave a profit of almost 600 a month. I feel the numbers are to good to be true and I feel my big learning curve would be how much it would cost me for rehab when my numbers are close to 10k for repairs, is it ok if you can share what your repair expenses were on a home of maybe 900 to 1300 sqf?
Rental Property Investor · Muncie IN · Member since 2015 · 68 posts · 25 votes
5y
@Paul Christian Mendoza your numbers look a little low. P&I will be $100, tax and insurance will run another $100. I plan $50 for repairs. Then you need to think about vacancy, uncollectible and capex. Vac/Uncol at 10% and capex of $100 has you at expenses of $425. Property management will run another 10% if you don't manage yourself. All added up you're at $500 minimum, giving you about $200-300 profit. I'm questioning what you're going to get for 10-30k and whether 10k in repairs will be enough. I typically look for 3/1 SFH but a 2/1 would run more like 30-50k from what I've seen.
@Roger Pokorny I've been looking into some where the repairs seem almost like basic cosmetic, I'm in maintenance so repairs really seem more logical and more money saved with doing them myself, but I am starting so I'm sure there's a couple things that are probably going to hit me in the face. I'm a semi new home owner now and have been remodeling my house and understanding price points for certain sqf and realizing that alot of the money being consumed is in hiring contractors. But at the same time I do know that alot of people have gotten really good contractors in Muncie where they're not trying to screw you money wise. Me and my business partner are splitting all costs. But we both are fully employed so it's kinda one of those things where we're not touching any of that money in maybe 5 years.
Rental Property Investor · Muncie IN · Member since 2015 · 68 posts · 25 votes
5y
It’s good that your learning the trade from the ground up. It’s the best way to understand costs. I do all the maintenance and repairs myself as well. I’m kind of a stickler on making sure everything functions properly and repairs are made promptly. My tenants appreciate it and hopefully the extra effort pays off in the long run.
Rental Property Investor · Muncie, IN · Member since 2020 · 1 post · 0 votes
5y
This is a great video 👆🏽of estimating numbers for renovation by Luke Weber. This may give you a general idea how to estimate based on the type of renovation you want to do. Hope this helps. Thank you.