Estimating expenses on buy and hold SFR
For all you seasoned and experienced investors who have bought and held SFR properties for a number years:
I'm trying to see if I'm on the right track for estimating long-term expenses for SFR.
Background: Purchased first SFR last year, ~2,000 sq ft, built ~1985 in our local small East Texas town (slow appreciation) in a pretty nice neighborhood. We've had the same tenants the last 18 months.
Rent: $1,350/month
Mortgage, Ins, taxes: $960/month
Our initial plan/goal was to acquire properties and hold them for long-term (20-30 years+) to essentially have the tenants pay for the mortgage and we would make a decent cash flow profit annually and then eventually have a solid asset (trying to diversify investing, e.g. not having everything in retirement accounts/stocks)
Just recently the A/C had some leaks and is pretty much on it's last leg and needing a replacement (quote of ~$8-$9,000 installed + fixing leaks in duct work). This got me thinking about the long term expenses that most houses will need and does the overall ROI seem reasonable.
So I googled some info and tried to estimate life expectancy of house appliances, carpet, roof, etc and costs (item + installation), then figured out the monthly cost out. Also, I added a "maintenance/repair" category for minor things like fixing a leaking toilet, broken window, etc. (see below)
My main question is: Do these estimates seem reasonable to those of you who have done this for a while? And it seems the cashflow/profit is not great...I'm starting to wonder if year after year it's worth the trouble and expense to keep up the house to eventually have a paid for asset. (hopefully my rambling thoughts make sense :-)
Thanks in advance!
Total cost Monthly cost
| A/C unit (replace every 15 years) | $8,000 | $45 |
| Roof (20 years) | 10,000 | 42 |
| Carpet (10 years) | 3,000 | 25 |
| Dishwasher (10 years) | 500 | 4 |
| Range (13 years) | 700 | 5 |
| Water heater (10 years) | 1,000 | 8.5 |
| Microwave (10 years) | 300 | 2.5 |
| Maintenance/repairs (minor) | 125 | |
| Total | 257 |
Mortgage, insurance, taxes 960
Total expenses = $1,217/month
Rent = $1,350/month
Cash flow/month = $133