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I am actually looking to live in the house for 4 years while my granddaughter attends HS, but then would think about possibly turning it into a rental. Would this be a good deal? What should I be looking for as far as ROI, etc.
@Kate Grunwald It must be the first time analysing properties. Vacancy of 2% = 1 month out of 4 + years , I use 8%. Repairs of 2% or $420 per year, better hope you don't have a clogged toilet. I use 5%. Capex of 2%. Let's look at floor capex. Let's say you have 1500 sf of flooring. In a rental life span is 8 years. In my area it is around $6 sf to replace. 1500*$6=$9000/8/12 months in a year= $94 per month which almost exceeds your vacancy,repair and capex budget. Add a couple more items like roof 25 year life span, appliances and hot water heater 12 years, HVAC 20 years. I could list more items but you get the idea, I use a minimum of 10%. To cash flow the numbers have to be close to the 1% rule. Monthly rent divided by 1%. $1800/.01= $180000 max purchase price. Most beginning investors underestimate capex.