Rental Analysis - Cash Flow
Hi MN BP Community!
I was wondering if you could share with me your experience regarding analyzing rental property and what your ideal cash flow looks like!
Brandon Turner (BP Co Host), when analyzing rental properties, likes to allocate some portion of the rental income to what he calls "Variable Costs". Mostly he allocates: 5% to Vacancy, 5% to repairs, 10% for CapEx and 10% for property management. I understand that these numbers are subjective to the market itself (and the investor) because when I used the methodology with the % given above, the cash flow is always about $100 or less with a cash on cash ROI less than 7%. So I was wondering:
1. What are some of the "variable costs" that you include in the analysis (with the respective % allocation)?
2. What is your average cash flow per unit on your properties in MN?
3. What is you ideal cash flow?
Thank you all