Is my cash flow projection way off?
Hi all -- I'm trying to build out some kind of cash flow projection formula for analyzing properties. I'm looking in Grand Rapids/Holland/Muskegon/Kalamazoo MI.
For simplicity's sake, assume a $100K property renting for $1000/mo:
- $400/mo for a 25% down, 30-year mortgage with 5% interest
- $300/mo for PM/vacancy/repairs/CapEx (30%)
- $250/mo for property tax
- $50/mo for home insurance
Expenses = $1000/mo
My first thought was that property taxes looked pretty high. Non-homestead millage rates are around 50-55 in Grand Rapids, whereas in Kalamazoo/Holland/Muskegon they're around 60-66. With a tax assessment ratio of 50%, that puts property taxes between ((50000 * .05) / 12) and ((50000 * .066) / 12), or $208 and $275 respectively. Is my math off?
Cheers