Looking to buy my first rental: an 8 unit apartment
I'm looking at possibly my first purchase, it's from someone I know, and I know the complex is in good shape. The unit is in a great part of town, very popular area. Units have all been renovated about 7 years ago. I'm hoping someone can give me an opinion and help with the numbers.
The apartment cost is $750,000. All 8 units are rented out and have been for quite some time. I also think rent is fairly low so would be easy to fill and could even be increased.
Rent is currently averaging $690 per unit so $5520 per month in rent income.
Monthly expenses = $1445. Insurance, tax, water, electric, garbage.
$7,000 maintenance last year $5,000 of it from a roof repair.
I think for this complex I will need to put down 35%, which I have saved up, but it's pretty much everything I have saved up.
If I put in a 5% vacancy, and $3000 annual maintenance.
That would give me a 13.2IRR.
$1484 monthly cashflow
5.66 cap rate.
I'm new and one of my biggest concerns is mortage rates right now are around 3%. Probably a beginner question but what if it goes up significantly?