Am I on the right track with this property?
HELLO BP COMMUNITY,
I just purchased my second single family rental property in St Catharine's. I was hoping to get some advice if I am setting up this rental properly in order to maximize my ROI and cash flow.
Purchase Price: 270K
Option 1:
Market Rent 1450-1700
Use 20% for down payment from existing HELOC, interest is at prime + 0.5%: payment: ~ 140$ per month
80% conventional mortgage at 5 yr fixed at 2.9% @ 30 year amort: 900$ per month
Property taxes at 203$ monthly
Insurance @ 100$ month
5% vacancy
10% property management (I'll be managing it myself)
10% Cap Ex
Cash Flow Summary: 1600 rent- (140+900+203+100+80+160+160)
= - 174.3 a month
Option 2:
Everything same as option 1 but use my own money for down payment.
Cash flow becomes -34.3$ a month
Option 3:
Either increase my HELOC down payment or personal down payment to 25-30% in order to increase my monthly cash flow.
I'm thinking option 1, I believe the market rents will increase in time and I know since I am managing it that I will save the 180$ monthly
I want to know if I am missing anything glaring?
I'm looking to purchase more properties in the coming months so having access to cash is very important but at the same time I do not want to be experiencing negative cash flow.
Thanks for your advice!