Analyzing an investment for cash flow
Dear Bigger Pockets members,
I'm looking for the homes around Syracuse. I have around 70K$ for this investment. Since it is going to be my first real estate investment, I focused on a healthy cash flow. I will start building my portfolio after experiencing and sustaining my first cash flow investment.
Closing costs
I always add 10% to the listing price as closing costs. Even it is generally listed around 5%; %3 for agent fee and 2-3% other closing costs, I always add 10% to be on the safer side.
Current Renter
I'm trying to focus on the properties with current renters. I know there are pros and cons for this but I want to start with cash flow and then start to research real market value for my property.
Property Tax
This one is generally 2-3% for the area that I'm interested in.
Other Costs
I would really appreciate if an experienced investor or homeowner lists me regular monthly or annual costs. Especially Syracuse is an area gets lots of snow. How much should I consider as exterior maintenance? Is there any fee regarding trash gathering etc? For the interior maintenance I'm planning to work with a handyman who would take care of any need.
Property Manager
This is second option for me to deal with all maintenance and rent collection. is it correct to have 10% of the rent for this? It would be easier for me to manage the property.
Thank you all in advance for your valuable comments and inputs.
#5 Contractors Contributor
- Flipper/Rehabber
the expenses are going to depend on the property. i own a duplex where i pay water and sewer and the tenants pay electricity and gas.
which utilities the landlord pays for vs tenant should be available online, or from a property manager who is knowledgeable.
8-12% is standard for property management.
great questions - keep researching.
#2 Managing Your Property Contributor
- Property Manager
- Birmingham, MI
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#2 Managing Your Property Contributor
- Property Manager
- Birmingham, MI
@Abdullah E. why don't you use the BP Calculators?
Hey how are you? I wouldn't mind chatting with you about taking your first plunge in the Syracuse. I'm closing on the sale of my duplex at the end of this month after owning it for over 7 years.
There's a few things I'd love to talk with you about. Are you a Syracuse native?
Hello Abdullah, your numbers are not bad. I'd also add $2-3,000 for immediate maintenance/repairs, our properties are over 100 years old in many cases. That's just for safety items. Monthly costs: garbage is usually part of taxes unless you have commercial, figure $600/year snow plow and lawn maintenance (I never have tenants do it in multi unit, they always fail), another $800/year for sewer jetting/cleanouts, pest control $300/year. Property management if you are not doing it can be expensive and useless in many cases, and sometimes they will gouge you if you are not paying attention, sending bills that you were unaware were coming. Even if you hire a handyman, they may take their time getting to you unless you have a strong relationship (or hire the franchises $$).
Quote from @Stephen Schmitt:
Hello Abdullah, your numbers are not bad. I'd also add $2-3,000 for immediate maintenance/repairs, our properties are over 100 years old in many cases. That's just for safety items. Monthly costs: garbage is usually part of taxes unless you have commercial, figure $600/year snow plow and lawn maintenance (I never have tenants do it in multi unit, they always fail), another $800/year for sewer jetting/cleanouts, pest control $300/year. Property management if you are not doing it can be expensive and useless in many cases, and sometimes they will gouge you if you are not paying attention, sending bills that you were unaware were coming. Even if you hire a handyman, they may take their time getting to you unless you have a strong relationship (or hire the franchises $$).
Thank you so much for the information! This is very helpful.
I’m planning to work with a skilled PM since I’ll be out of the state. Considering the numbers you shared it costs around 150$ per month. On the other hand, a PM will cost around the same amount with 12% if the rent will be 1200$.
will the pm charge for the costs mentioned above as additional fees or will they cover these in their monthly fee of 12%?
I also read your other comments. You have very valuable information about Syracuse.
@Cerwin Haynes I’m not a native of Syracuse. I live in NJ Hudson county.