I am looking at a 3/3 detached house close to my house.
Original price was $168k, then $150k, now $139k. Zillow says it's worth $131k
Rent should be around $1100/month.
As this is my 3rd house, I would need to put down 20%, so financing only 111k..
Worth it ?
You need to evaluate taxes, insurance, maintenance, debt service, etc.
Will you manage the property yourself? Even if you self manage your evaluation should include potential PM cost because you may want to us a PM one day.
Check out the BP Rental Calculator:
Pro Forma Cap Rate:8.21%
Total Cash Needed:$31,980.00
Cash on Cash ROI: 14.64%
Purchase Cap Rate:8.21%
I just sold my last property ( held for 3 years ) and profited $53k.
I am just wanting to invest the cash again.
My rough math:
End of year #1:
Rent Profit ( $532*12 ) = $6,395
Down Payment = $27,980
Drop in Balance = $1,812
Total = 8,355 / 2,7980 down payment = 30% ROI
People around here are very analytical and the difference in your numbers between one post to the next is what's possibly keeping them from responding. In one you indicate 11.5k in NOI and the other just $6400. Which is it? What is "drop in balance"? Is that principal paydown? It appears your adding it to you "rent profit" which if it's simple paydown you wouldn't add it to NOI.
Maybe try cleaning things up and see if we can help. Hell, I could very well be the only confused here :)
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