Looking for guidance on property lived in first then renting
New to Real Estate · Reno NV · Member since 2020 · 38 posts · 19 votes
Looking for guidance on property lived in first then renting
Most Popular Reply
Lender · San Diego, CA · Member since 2019 · 874 posts · 355 votes
6yOriginally posted by @Jarod Castaneda:
Rental Property Cash Flow Analysis
| Monthly Operating Income | Scenario A |
| Number of Units | 1 |
| Average Monthly Rent per Unit | 1,575.00 |
| Total Rental Income | 1,575.00 |
| % Vacancy and Credit Losses | 5.00% |
| Total Vacancy Loss | 78.75 |
| Other Monthly Income (laundry, vending, parking, etc.) | - |
| Gross Monthly Operating Income | 1,496.25 |
| Monthly Operating Expenses | |
| Property Management Fees | |
| Repairs and Maintenance | 110.00 |
| Real Estate Taxes | 333.00 |
| Rental Property Insurance | 51.33 |
| Homeowners/Property Association Fees | 10.00 |
| Replacement Reserve | 110.00 |
| Utilities | - |
| - Water and Sewer | |
| - Gas and Electricity | |
| - Garbage | |
| - Cable, Phone, Internet | |
| Pest Control | 75.00 |
| Accounting and Legal | |
| Advertising | |
| Monthly Operating Expenses | 689.33 |
| Net Operating Income (NOI) | |
| Total Annual Operating Income | 17,955.00 |
| Total Annual Operating Expense | 8,272.00 |
| Annual Net Operating Income | 9,683.00 |
| Capitalization Rate and Valuation | |
| Desired Capitalization Rate | 10.00% |
| Property Valuation (Offer Price) | 150,000.00 |
| Actual Purchase Price | 154,000.00 |
| Actual Capitalization Rate | 6.29% |
| Loan Information | |
| Down Payment | - |
| Loan Amount | 150,000.00 |
| Acquisition Costs and Loan Fees | 4,000.00 |
| Length of Mortgage (years) | 30 |
| Annual Interest Rate | 3.250% |
| Initial Investment | 4,000.00 |
| Monthly Mortgage Payment (PI) | 652.81 |
| Annual Interest | 4,830.53 |
| Annual Principal | 3,003.19 |
| Total Annual Debt Service | 7,833.71 |
| Cash Flow and ROI | |
| Total Monthly Cash Flow (before taxes) | 154.11 |
| Total Annual Cash Flow (before taxes) | 1,849.29 |
| Cash on Cash Return (ROI) | 46.23% |
So no money down and the tenants are paying for you. That's free money.
8 Replies
- Lender · San Diego, CA · Member since 2019 · 874 posts · 355 votes6y
Originally posted by @Jarod Castaneda:
Looking for help in evaluating a home I purchased and lived in for 2 years. In the military at the time and moved. Decided to rent. Now having joined Bigger Pockets I want to see if what I have is a good deal and not sure how to figure out. Please let me know how to do this.
Jarod congrats, now please share the following info to analyze your deal Ill shoot back a quick review.
Monthly Operating Income
Monthly Operating Income: $
Monthly Operating Expenses (Don't forget these are MONTHLY numbers)
Property Management Fees $
Repairs and Maintenance $
Real Estate Taxes $
HOA $
Replacement reserves $
Utilities paid by you if any $
Pest Control $
Accounting, Legal & Advertizing $
Capitalization Rate and Valuation
Desired Capitalization Rate % (if you don't know its ok)
Actual Purchase Price $
Loan Information
Down Payment $
Loan Amount $
Acquisition Costs & Loan Fees $ (Points, Title, Escrow etc)
Annual Interest Rate %
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes6y
How to evaluate a rental is just one of many, many tools provided by BiggerPockets that will teach you how to evaluate a property. Watch a couple of the videos or read some blogs on BP and then practice a few times. It's pretty simple.
The DIY Landlord Book4.7248 Reviews - New to Real Estate · Reno NV · Member since 2020 · 38 posts · 19 votes6y
Monthly Operating Income: $ 1575
Monthly Operating Expenses (Don't forget these are MONTHLY numbers)
Property Management Fees $ 0
Repairs and Maintenance $ 110
Real Estate Taxes $ 333
HOA $ 10
Replacement reserves $ 110
Utilities paid by you if any $0
Lawn $ 75
Accounting, Legal & Advertizing $ 0
Capitalization Rate and Valuation
Desired Capitalization Rate % (if you don't know its ok)
Actual Purchase Price $ 154000.
Loan Information
Down Payment $ 0 VA loan
Loan Amount $ 154000
Acquisition Costs & Loan Fees $ (Points, Title, Escrow etc) 4000 (house was 150 and 4K was the closing cost
Annual Interest Rate % 3.25
Again, We bought this house without the intent to rent. When I was stationed to a different location we had intent to come back. We've had tenets since the day we left in 2014 and it sat vacant for 10 days in Jun 2019. Their lease is over in Jun of 22.
- New to Real Estate · Reno NV · Member since 2020 · 38 posts · 19 votes6y
- New to Real Estate · Reno NV · Member since 2020 · 38 posts · 19 votes6y
Thank you @Nathan Gesner I've used that calculator I just didn't know if it would give me accurate numbers based on me living in it prior.
- Rental Property Investor · Winston Salem, NC · Member since 2019 · 63 posts · 54 votes6y
@Jarod Castaneda considering youre at the 1% rental mark, id say its a good rental. (I didnt dive into the number)
- Lender · San Diego, CA · Member since 2019 · 874 posts · 355 votes6y
Originally posted by @Jarod Castaneda:
Rental Property Cash Flow Analysis
Monthly Operating Income Scenario A Number of Units 1 Average Monthly Rent per Unit 1,575.00 Total Rental Income 1,575.00 % Vacancy and Credit Losses 5.00% Total Vacancy Loss 78.75 Other Monthly Income (laundry, vending, parking, etc.) - Gross Monthly Operating Income 1,496.25 Monthly Operating Expenses Property Management Fees Repairs and Maintenance 110.00 Real Estate Taxes 333.00 Rental Property Insurance 51.33 Homeowners/Property Association Fees 10.00 Replacement Reserve 110.00 Utilities - - Water and Sewer - Gas and Electricity - Garbage - Cable, Phone, Internet Pest Control 75.00 Accounting and Legal Advertising Monthly Operating Expenses 689.33 Net Operating Income (NOI) Total Annual Operating Income 17,955.00 Total Annual Operating Expense 8,272.00 Annual Net Operating Income 9,683.00 Capitalization Rate and Valuation Desired Capitalization Rate 10.00% Property Valuation (Offer Price) 150,000.00 Actual Purchase Price 154,000.00 Actual Capitalization Rate 6.29% Loan Information Down Payment - Loan Amount 150,000.00 Acquisition Costs and Loan Fees 4,000.00 Length of Mortgage (years) 30 Annual Interest Rate 3.250% Initial Investment 4,000.00 Monthly Mortgage Payment (PI) 652.81 Annual Interest 4,830.53 Annual Principal 3,003.19 Total Annual Debt Service 7,833.71 Cash Flow and ROI Total Monthly Cash Flow (before taxes) 154.11 Total Annual Cash Flow (before taxes) 1,849.29 Cash on Cash Return (ROI) 46.23% So no money down and the tenants are paying for you. That's free money.
- New to Real Estate · Reno NV · Member since 2020 · 38 posts · 19 votes6y
Well that's just great news! Thanks @Guifre Mora!!
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