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Hello everyone. This is my first calculation that I am going to share with everyone. Yes, the numbers look awful. I just grabbed the numbers straight from Zillow. Let me know what is needed to make this a better deal, please.
@Gernot Bucheli price has to be lower or income has to be higher. You are underestimating your soft costs. Vacancy of 5% is your tenant staying 20 months on average. If you have to evict someone you will be out 2 months minimum income. So your next tenant will have to stay 40 months to get back to 5%. I like to analyze at 8% or 1 turnover per year. What do you include in your capex budget. Mine has roof, floors,hcac,appliances,hot water heater,bath remodel, kitchen remodel, etc.Look at 1 item in a capex budget. Floors have a 10 year life span. Assume you have 1000 sf of flooring. My area it is $6 sf to replace. $6000/10 year life span/12 months in a year =$50 per month for floors. Leaves $38 per month for all the rest. A quick down and dirty analysis is the 1% rule. Monthly income /.01=Max purchase price. $1750/.01=$175000. You can still cash flow if it is less than 1% but that has to mean low property tax.Rental properety insurance should be lower. You don't have to insure contents unlessit is a short term rental.
@Tim Herman Thank for your feedback. I’ll adjust the numbers as suggested. I really appreciate the help.