Here is a potential opportunity I am considering. See below for the numbers...
I would appreciate any feedback, thanks in advance.
Selling Price: $78,000.
Renovation costs estimate: N/A
Total Investment: $78,000.
Monthly Gross Property Income: $1,200.
Yearly Gross: $14,400.
Utilities: water/sewer, garbage: $750. est. (tenant pays electric and gas)
Annual City Rental License Fee $40/unit: $80.
Yearly expenses: $3,723.
Net operating income (NOI): $10,577.
Capitalization Rate: (NOI divided by total investment): 12.3%
posting id: 4769234201
posted: 19 days ago
updated: 12h ago
Looks good. Can you validate the rental prices and make sure they're not inflated? Ask for the last couple years P & L to validate expenses. Review short-term appliance needs.
How is the neighborhood? Try to come up with a reasonable value for vacancy rate.
Looks to me like your maintenance might be a bit low....if a refrigerator goes out your maintenance budget is shot. I don't see any allowance for vacancy's either.
Are you going to manage these yourself? May want to include the cost of a property manager because you never know. If it is a good deal with PM its a good deal without.
I've got a couple of questions:
1. Is it never vacant? If it is, there should be allowance
2. $400 Maintenance - I hope that's per month
3. CapEx - stoves, refrigerators, HVAC, flooring, roofs, sump-pumps - those break eventually; better set some money aside...?
This might still work, but do yourself a favor and put-in all of the costs. This way you can gain a more meaningful perspective...
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