First time investors looking to make sure we do our due diligence. Sounds good to us but want to make sure we aren't buying out of excitement to get started. Thanks for all the awesome collaborators here on this amazing platform!
@Breanna White I personally would have a larger budget for maintenance, capital expenditures, as well as vacancy. The estimates I usually use for these items are 10% of monthly rent for maintenance, 5% for capX, and 8% for vacancy (1 month empty per year). Even with these adjustments, the numbers you are presenting still look very solid in this market, considering that the high cost of capital currently makes it difficult to find cash flowing properties at all. The one thing that I may be cautious about is being able to find a tenant. I am sure you know your market more than I do, but using the 3x income rule for a rent of 3,980 means that your tenant would need to make a yearly income of slightly over $140,000. While this can certainly be accomplished in the right area, keep in mind that your client base in this case is around 5% of the national population. Many in that income bracket also have the capability to buy their own property. I don't say this to scare you away from this property, but just something to consider once you are ready to begin looking for tenants.