How do I factor initial costs into the expenses of an investment property
Hi
We are looking at purchasing our 2nd rehab to rent investment property of a 2Br/1Ba townhouse. We are using traditional financing 30 fixed with 25% down. The home is being priced at 150 and we expect to get 1350 in rent. This one will need an estimated 15k to remodel and fix a leak/mold issue. My question is when calculating the monthly free cash flow (rent minus expenses (Taxes, HOA, Ins, Maint and Rent Vacancy) how do I factor in the cost of the initial remodel expense? I don't think I should add it to the cost of the house since I am not financing the repairs but coming out of pocket for them. Should I divide the 15k into monthly payments but if so for how long? I hope this question makes sense.