All Forum Posts by: Deepa Jan

Hi All, First time investor and a newbie here. I am looking at a property in Jarrell, TX for approximately $225. But when I crunch the numbers, it doesn't sound too great. I got the excelsheet from VIP financial online in case if you are wondering how i crunched the number.

My input:

Property value: $225k, Downpayment 20%, Rental income: 1400, Vacancy rate: 5%, Annual Rent increase: 2%, Annual Appreciation rate: 10%

Interest rate 3%

Here is the output: Annual cash flow before tax - negative $2147, Cash on cash return - negative 4%, CAP rate 3.1 %, 5 year after tax return : 22.7%

Here are my questions:

• - Isn't the monthly rent taxable? I live in California. So technically it's 1400 - 28% tax, right ?
  
• - Is this investment worth it ? 
• - New construction and not sure how the appreciation is going to be
• - Should i be looking at other factors as well ?

Really appreciate your input.

Thanks

Deepa