Chicago suburb condo buy and hold
Looking to make an offer on my first rental property. It is a two bedroom, one bath condo unit in Oak Lawn, a southwest suburb of Chicago. Neighborhood is a nice, middle class area.
Listed as short sale on MLS for $60,000.
Market rent in the area is $1000/month.
Assessments are $2,364/year.
Taxes are $1,354/year.
Insurance is $600/year.
I estimated maintenance/cap ex in addition to assessments to be $1,000/year.
I estimated vacancy at 5%, or $600/year.
At 20% down, my principal/interest payments on a 30 year loan would be $250/month.
Water and garbage are paid out of the assessments, so that is an additional $0.
I will manage the property myself. So property management is $0.
So plugging all those numbers in, here are the results:
Total rental income per year - $12,000
Total expenses per year - $5,918
NOI - $6,082
Cash flow per month - $256.44.
Cap rate - 10.14%
Cash on Cash return - 25.64% (Property is turnkey. No money needs to be put into it upon purchase).
Seems like a great deal. Anyone see any flaws in my analysis? Thanks in advance for any help!