Updated over 6 years ago on . Most recent reply
[Calc Review] Help me analyze this deal
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Ok, this is my first time to use this calculator for an actual property I am considering...I'm not sure if I've done it properly. I would've said yes before running the numbers...but the numbers are saying no. Have I done something wrong or is this just not a good property.
This is in a low rent town, it's a 2/1...even if I turned it into a 3/2 I could get $900 max per month. Is the rental rate the real problem?
Most Popular Reply
So the percentages here definitely vary by location and age of the house and other factors but just a few things that stick out to me:
1. I analyze with 8% vacancy and you have 5% - 8 comes out to about one month of vacancy
2. you have CapEx reserves at 100% and Repairs at 75% - Keep in mind that these percentage are a percentage of the monthly rent and typically wouldn't be over 10-15%
Saying 100% capex and 75% repairs essentially means that every year you're going to spend 100% of your rental income on capital expenditures and 75% of your income on repairs. Watch some videos by @Brandon Turner to see what he uses for his reserves. It's a good base line and you can adjust to your area and your specific property.