I am looking to be a buy and hold investor. I own one property (former primary residence.)
Belcamp, Maryland 21017
Suburb of Baltimore, Maryland
Semi-unique situation because proximity to Aberdeen Proving Ground (military base) provides a reliable source of quality renters
Least expensive rentals in area available are approx. $1150/month for 1-BR 1-BA apt
Purchase price= $165,000
Current appraisal = $170,000
Interest rate = 4.125%
P&I + Ins. + taxes = $853/month
HOA = $66/month(paid by me)
Property Manager = 7% ($98/month)
Rent = $1400/month
I understand that repairs are an expense and that the possibility of vacancy is as well (more worried about the property management costs to find a new tenant).
I am looking for some help looking for a good way to calculate expenses. I am pleased with what I perceive as positive cash flow but dunno about if that is accurate. I definitely want to get this down before I expand my business. I am terrified by the 2% rule since in my area following that means buying properties in seriously bad shape in seriously rough areas.
Hey @Andrew Bertram -
So, off the top of my head, I can think of "Repairs," "Vacancy", and "CapEx" (the big picture stuff, like roof/appliances/etc that add up over time.) Also - any utilities?
I ran the numbers through the BiggerPockets Rental Property Calculator.
Here's the PDF report it generated. Or here is an image of page 1 below.
Based on the few assumptions I made, I see cash flow in the $163.26 per month range, making the Cash on Cash around 5.16%. Not amazing, but not terrible, especially if you think this area might produce a good appreciation. Plus there is the tax benefits and loan-pay-down.
The tenant please all the utilities. I was really looking for a formula to help calculate what I should expect as far as large long-term repair expenses for example roof air-conditioning unit furnace etc. I am more interested at least for the time being in investing part-time my goal is to have around $10,000 per month passive income in about 20 years. My mindset was that this property is positively cash flowing and once the note is paid off it's cash flow will be much higher. Is this sound logic? Is there an easy way to calculate what my cash flow would be at that point from this property given that I will no longer Have the tax shelter of the mortgage.
@BrandonTurner I forgot to tag you in my response.
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