ROI analysis in 38115 SFH property home
I have a 3/2 sfh in 38115, Memphis, TN. It is doing okay at the moment. I am getting ROI of 12.88% at the moment.
1) Any advice on the ideas to improve ROI for the next home purchase?
2) Is there any risk going forward in the future in cash flowing this property for the long term??
| Monthly Operating Income | Scenario A |
| Number of Units | 1 |
| Average Monthly Rent per Unit | 1,175.00 |
| Total Rental Income | 1,175.00 |
| % Vacancy and Credit Losses | 2.00% |
| Total Vacancy Loss | 23.50 |
| Other Monthly Income (laundry, vending, parking, etc.) | - |
| Gross Monthly Operating Income | 1,151.50 |
| Monthly Operating Expenses | |
| Property Management Fees | 105.00 |
| Repairs and Maintenance | 10.00 |
| Real Estate Taxes | 126.00 |
| Rental Property Insurance | 49.78 |
| Homeowners/Property Association Fees | |
| Replacement Reserve | |
| Utilities | |
| Pest Control | |
| Accounting and Legal | |
| Monthly Operating Expenses | 290.78 |
| Net Operating Income (NOI) | |
| Total Annual Operating Income | 13,818.00 |
| Total Annual Operating Expense | 3,489.36 |
| Annual Net Operating Income | 10,328.64 |
| Capitalization Rate and Valuation | |
| Desired Capitalization Rate | 8.00% |
| Property Valuation (Offer Price) | 129,108.00 |
| Actual Purchase Price | 119,900.00 |
| Actual Capitalization Rate | 8.61% |
| Loan Information | |
| Down Payment | 35,000.00 |
| Loan Amount | 84,900.00 |
| Acquisition Costs and Loan Fees | 1,500.00 |
| Length of Mortgage (years) | 30 |
| Annual Interest Rate | 5.250% |
| Initial Investment | 36,500.00 |
| Monthly Mortgage Payment (PI) | 468.82 |
| Annual Interest | 4,428.72 |
| Annual Principal | 1,197.13 |
| Total Annual Debt Service | 5,625.85 |
| Cash Flow and ROI | |
| Total Monthly Cash Flow (before taxes) | 391.90 |
| Total Annual Cash Flow (before taxes) | 4,702.79 |
| Cash on Cash Return (ROI) | 12.88% |