[Calc Review] Help me analyze this deal

3 Replies

@Michael Otoole , are you intending to keep this as a STR or a normal rental?

Regarding your expenses:

  • Your repairs are way too low and you're forgetting CapEx altogether. I usually figure 15% combined. You may be able to bring that down a little since the HOA will be handling exterior issues.
  • If this is going to be an investment, you'll need to put at least 20-25% down. The upside is no PMI.
  • Interest rate will probably be closer to 5%.
  • Electricity is too low. Probably closer to $80-100/month. Of course, if this is a normal rental, the tenant will pay.
  • Management will be 10-12%.
  • What's the $350/month "misc?"
  • Insurance will probably be a lot lower.

This is very unlikely to cash flow because you're nowhere near the 1% rule. Probably not a good investment.

@Jaysen Medhurst . Hey! Thank you! So this is in a location that I will vacation at so it is part a lifestyle investment vs financial investment. I got approved for 10% down with a local lender in Ptown at 4.25% which I thought was amazing so I don't have to put our much cash. The cap ex is low because the heavy expenses are covered in HOA. And the place is in good shape now but I see what you mean by budgeting for it. The building is in great shape and hoa finances are too- new roof, new septic tank, etc. The $350 is for taxes on air BNB by the town. They charge 14.45% tax. I have always used air BNB and passed cleaning fee on to renter so I have never hired a management company as it feels like a waste if you have a good cleaner/turnover service and I manage the bookings via the air BNB app. I have several friends that live in area and are retired. I can always call on them if I was in a pinch for something. I don't think this is a good cash cow. However - I really want to retire in Ptown in the summers and stay in Atlanta rest of year. So I thought I should get into market while I can and then make money on selling it 5 - 10years from now and then buy something bigger