Closing costs in Rental Income?
Hello Internet's Landlords! This is my first post on BiggerPockets, so please forgive any lingo spelling errors and the like.
I am interested in buying a rental property. I know the purchase price, approximate rental income, obvious expenses (taxes, ins, prop management, etc)..... but I want to know if anyone also budgets for possible future closing costs in their numbers? Or is that just a sad fact of life?
I am thinking to budget 10% of the purchase price (conservative estimate of closing costs with wiggle room) divided over 10yrs of income. Which amounts to 1%purchase-price-a-year set aside. Ex: A 2/1 SFH which costs $84,000 (cash, no mortgage). Set aside $840/year or $70/month for paying future closing costs (should the need or want to sell in 10years time come up.) If I don't sell in 10years then I have a useless saving acct with roughly $8,500 sitting there, doing nothing, BUT if I do sell then I won't lose out on basically all of the income/profit made over the last 10years?
Am I being too caustious or too parinoid? Is my math wrong? What about apperictaion on the house or inflation values? Am I over thinking this? (0_o)