First Analysis of Buy and Hold
I found a piece of property to practice on, now granted this is the listed value on Zillow so I understand it may not be a realistic property to practice on, but the numbers should flow pretty similarly. I'm looking at buying and holding. This is one that wouldn't require a lot of rehab work upon entry, I've allowed for $4000 to spruce it up a bit. The property is a 3 bed, 2 bath in a region that rents for $1400 based on Rentometer.
Have I included everything I need to in order to properly evaluate this property? I've allowed for 12% of the rental income for property management, 10% for repair values, 1 month of rental income for vacancy, and $182.75 for Cap Ex based on this blog post.
With a negative cash flow of $5,575 and an upfront cash payment of $50,550 I'd be looking at a -11% cash on cash.
| Purchase | $190,000.00 | ||
| Interest Rate | 4% | ||
| Years | 30 | ||
| Down Payment | $38,000.00 | ||
| Improvements | $4,000.00 | ||
| Closing Costs | $8,550.00 | ||
| Total Upfront Cash | $50,550.00 | ||
| Income Stream 1 | $1,400.00 | Monthly | |
| Total Income Monthly | $1,400.00 | Monthly | |
| Property Taxes | $2,000.00 | Annual | |
| Insurance | $1,000.00 | Annual | |
| Lawn Care | $100.00 | Monthly | |
| Mortgage | $907.09 | Monthly | |
| Total Fixed Monthly | $1,257.09 | Monthly | |
| Vacancy | $116.67 | Monthly | 1 month |
| Repairs | $140.00 | Monthly | 10% of rental income |
| Cap Ex | $182.75 | Monthly | https://www.biggerpockets.com/renewsblog/2015/10/13/real-estate-capex-estimate-capital-expenditures/ |
| Property Management | $168.00 | Monthly | 12% of rental income |
| Total Variable Monthly | $607.42 | Monthly | |
| Cash Flow | -$464.51 | ||
| Yearly Cash Flow | -$5,574.07 | ||
| First Year Cash on Cash | -11.03% |