[First Time Investor] Help in deal analysis
Hello,
I am looking at this property and looking at it to be my first investment.
Here is the link to the Analysis
I am looking at it as a buy-and-hold property and renting it out on VRBO/Airbnb.
Looking for suggestions that I could look out for.
Open for collaboration. Appreciate your help!
Thank you,
Dhruv K.
Hi @Dhruv Kalaria, there are a few things I see. Below is my feedback.
1. 2% vacancy is really low, especially for an STR.
2. A 5.2% interest rate is low unless you are buying this as a primary residence and renting out part of it or an ADU as the STR.
3. 3% for maintenance and cap ex is also really low, especially for an STR.
4. You did not include any utility expenses.
I would re-run the numbers once you make the necessary adjustments and see if it still works.
Hope this helps! Let me know if I can be of any assistance.
In my market STR property management runs from 18% to 30% with most being 25%. Your PM cost is more in line with LTR PM fees. I would check the STR PM fees in your market but will be very surprised if there are any decent options at less than 15% and will not be surprised if the majority are 25% or even 30%.
If you have the rent correct this has large negative cash flow unless you self manage. Did you use AirDNA for your expected monthly rent? Self managing an STR is more effort than self managing LTRs.
good luck