I am starting my quest into investing and renting multi-family units. I wanted to get your opinion on expenditures. I know I need to compensate for electric, water/sewer, property tax, garbage, vacancy %, repairs/maintenance %, and capital expenditures. I am incorporating these when I am evaluating deals. What other expenditures should I include when evaluating if a deal will give me good cash flow and cash on cash return?
Unless it is >20% down you try to find breakeven point. One also need to focus on appreciation as some areas have close to below inflation rate for sometime.....
The condition of newer properties will reduce the repairs/maintenance cost to a great degree.
First you have to determine what is your responsibilities of paying and what is the tenants responsibilities of paying.
As a general rule - the landlord's expenses/allowance will include repairs/capital expenditures/vacancy/property taxes/mortgage interest/mortgage principal/etc
Depending on the county - Water and Sewer can be included in property taxes and be the responsibility of the landlord.
Items such as electricity/water/gas is up for negotiation to be paid by either the landlord or tenant depending on what is said in the lease.