Recouping Initial Investment

2 Replies

Is there a basic calculation for the time it take to recoup the initial outlay when purchasing a rental property...for example:

If I buy a SFH at $100,000 with a 25% down payment and $10,000 in costs to ready for a tenant, how long does it take to recoup the initial outlay?

And what about mortgage vs. positive cash flow...say the mortgage payment on the purchase is $800/mo. and the rent is $1,300/mo....nowhere near the 2% rule....and does the fact that the tenant is building equity in the property matter?...or appreciation? 

regarding the first question... you almmost have it. what's your monthly left over cash? let's say it's 325. you take 25k (25% of 100k) and add 10k for rehab = 35k.

then take 35k/325 = 107 months (almost 9 yrs)

second question.. go to "resources" on top. go to "fileplace", get jscott's spreadsheet. it has what you need.

Originally posted by @George P.:

regarding the first question... you almmost have it. what's your monthly left over cash? let's say it's 325. you take 25k (25% of 100k) and add 10k for rehab = 35k.

then take 35k/325 = 107 months (almost 9 yrs)

second question.. go to "resources" on top. go to "fileplace", get jscott's spreadsheet. it has what you need.

 George, much appreciated.

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