[Calc Review] Help me analyze this deal
Hi all! This is my first real opportunity since joining to use the calculator to assist in analyzing a deal.
Property is listed for $69,900. But agent feels between $52,500 - $55,000 is more appropriate based on recent sales in the neighborhood. Property disclosure form indicated "dampness around basement walls during heavy rains." My first property had this issue. It took $10K to fix it. So I assumed the same $10K CapEx here as well.
This is a long-term buy & hold property (5+ years) looking to generate positive cash flow and deductions for tax purposes (accountant says we need more deductions).
Rentometer claims around $825-$850 is a decent rent. Property manager thinks $750 might be the max. Not sure where Rentometer pulls its rental info, but property manager thought it looked inflated.
According to Trulia, the area has seen a steady 3% annual growth in property values. Property manager has been able to obtain between 4%-6% annual rent increases.
So... what do you think?
*This link comes directly from our calculators, based on information input by the member who posted.
Hey @Terry Dunlap! How is the location?
Rentometer is accurate but you have to look at the properties it pulls up, itll list all classes of properties. Your PM's projection is likely more accurate in this case.
For the income/expenses projection, I generally go the conservative route and estimate 3% growth in both areas.
Thanks @Jake S.!
Location is decent. Not a slumlord-type area. My agent is actually booking a time to head over there and do a walk-thru for me since this is an out-of-state opportunity.
Yeah, I figured going with my PM's experience is the better number to plug into the calculator.
And roger that on the income/expense growth rate!