I'm a newbie to real estate investment, and am looking to "House Hack" a 3-4 multifamily by 2020. My target county is Hartford (Manchester, E.Hartford, Hartford New Britain).
Can anyone offer insight to the repair / maintenance costs of leasing properties in these areas?
Also, what steps should I be taking to thoroughly vet potential tenants?
You'll have to put in the work to figure out costs for mortgage and taxes as they will vary depending on the property, town, amount of down payment, and your personal financial situation. You can't just plug in a percentage.
Here are the numbers I use to analyze a potential deal. They are mostly a percentage of Gross Scheduled Rent (GSR).
Repairs and CapEx: 15% combined
Gas: $0. I rarely consider properties where tenants don't cover their own utilities.
Electric: $50-80. Only applicable if there is a "house" meter. If so, call the utility company and see if they'll give you a year's worth of charges.
Lawn / Snow: $100+/month depending on the lot, etc. You may be able to negotiate this into your management contract.
Sewer / Water: $30-40/unit/month. Call the town and get a year's worth of charges. Always ask for the houses next door, too. That will give you a sense if something is off.
Vacancy: 8%
Garbage: $0. Typically, no extra cost, if there is town pick up. Confirm as this changes town-to-town and may depend on the size of the property.
Management: 10%. Always underwrite with management, even if you plan to self-manage.
It's a good idea to budget money for professional fees (tax prep, LLC, etc.).
Rental Property Investor · Greenwich, CT · Member since 2015 · 4k+ posts · 2k+ votes
7y
@Champagne Goldston, you should absolutely ask for the last 12 months of expenses and any major repairs / CapEx items that were done as long as the seller has owned the property.
You'll never understand the exact condition of a property, though. Don't deceive yourself into thinking you can. That's why due diligence is so important.