Analysis - Too Late? Negative cash flow :-(
Hello,
I could really use some help analyzing my first rental property. I financed this particular house - newly built in 2013 - as my residence using a VA Loan, (no money down) for 168,000. The home is located in Killeen, Texas which is a military town in case you haven't heard of it. It is quite possibly the lowest value home in this neighborhood. I'm on a cul-de-sac with a 320,000 home on the left and a 200,000 home on the right. I will be moving out at the end of this month and already have a tenant in place, renting for 1200. The low rate was a personal favor to someone I know, and after one year the rent will go back to 1300 and stay there.
If I'm doing this analysis correctly, I believe I'm projecting a negative net cash flow. This is a bit vexing to me especially because the other homes in the neighborhood are renting for a similar price but have much higher values overall.
EFFECTIVE GROSS INCOME (10YEARS) @1300/mo.
Potential Rental Income = 156,000
Vacancy = 15,600
Concessions/Delinquent Rent = 1560
Net Rental Income = 138,840
OPERATING EXPENSES
Insurance = 15,000
Taxes = 24,326
Repair/Maintenance = 15,000
Property Management = 15,600
Landscaping/Pest Control = 4500
NET RENTAL INCOME AFTER OPERATING EXPENSES = 64,414
MORTGAGE EXPENSE (~$800 a month principal and interest) = 96,000
NET CASH FLOW = ................. - 31586
My question, aside from whether I am computing these numbers correctly, is should I consider selling this property instead of holding onto it? I have also already made an additional 8,000 in improvements.
What would you do as an experienced investor if this was YOUR first property? Thank you! -Zach