I just closed on my second property. The property is a condo unit in one of the wealthier suburbs in the St. Louis area and is within walking distance from the downtown district. I am haopy with the deal but would like to see what others think as far as risk return.

The unit is a 2 bedroom 1 bath, 900 sq ft, 450 sq ft storage space, balcony, in unit washer dryer, outdoor parking, brand new paint and carpet, with appliances that are far from new but good condition.

I analyzed the deal using the rental rates others are getting in the complex and subtracting all of the known expenses. After that I increased "other" expenses as a % of rent until I got to 10% cash on cash. 

Cash Down: #22,000

Rent         $1,100

HOA $145

Taxes       $101

Loan         $339

Insurance $15

Total:        $600

Balance: $ 500

$500 - Monthly Cash Flow Needed to get 10% $183 = $317 or approx 29% for vacancy, capex, maintenance & (even though I am self managing I am including management as an opportunity cost).  

I estimated CapEx without the items paid for by the association at around 5%. I think 5% for maintenance is reasonable as well since I have no landscape or exterior maintenance duties. I assume standard 10% vacancy and property management fees at 10% each and I am right at the 10% cash on cash mark (15.2% after adding back the property management).

I am more than happy with a 10% cash on cash return for a rental in a b+ to a neighborhood. I do not assume any appreciation in my analysis and look at the potential for appreciation as a potential upside.