Analysis Duplex (First Investment
Hello,
I am looking to purchase my first owner occupied self managed duplex (2/2) in Western New York (North Buffalo). I wanted to get some feedback regarding my analysis of a property and the 50% rule due to high property taxes. It is an older house (1920s) in a more trendy/ popular area. The eventual plan is to move out and buy more properties so the calculations reflect a 100% tenant occupied property.
I am not looking to become rich off this property but would like to know I wont likely lose my shirt. At this point I am just as interested in the social aspect (time spent/headaches) of being a landlord and how it will mesh with my day job. Although I am not handy at all I am more than willing to handle regular maintenance.
Sale Price: 100,000 (prices between $90k & $110k in rentable condition)
% down: 20% @ 3.75% (pre approved)
Rents: $625 each (+/- $25)
50% Rule= $15,000 (Rental Income) - $7500 (50% rule)- $370 (Debt Service)= $127 per month per side
My Analysis = $15,000 (Rental Income) - $9665 (Operating Expenses)- $370 (Debt Service)= $37 per month per side
Maintenance (2.5% of Sale Price) $2,500.00
Taxes (Estimated) $2,500.00
Insurance (Estimated) $750.00
Vacancy (8.5%) $1,275.00
Property Management (10%) $1,500.00
Utilities (Water & Sewer Estimated) $840.00
Other (Long Term Maintenance) $300.00
My questions:
- Does the 50% hold water in my area and particular situation (older house) and high taxes?
- Are my estimated costs too high/low or flaws with my calculations?
- What would you expect to cash flow/ would you be interested in this property?
- Do you feel the big ticket items (replacing roof, siding, furnace, remodeling, & etc.) are built into the 50% rule or the 2.5 % maintenance I calculated?
Any and all input is appreciated.
Thanks.