Updated almost 6 years ago on . Most recent reply
Looking for guidance on property lived in first then renting
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.
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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.