All Forum Posts by: Account Closed

Thanks, Ann.  Was wondering why it wasn't working.  Sometimes it works and sometimes it doesn't.

...And Shaun, I agree with you on the two points.  I'm not as concerned with cash flow as I am building equity and/or future cash flow.  My concern is that I don't want to be *spending* money each month (negative cash flow).

Actually @shaunreilly, my numbers were fictitious :-)  I was just using them for an easy example.  But good analysis!

I'm not looking at duplexes, since I don't think they really generate enough cash flow. I'm trying to focus on 3-4 units.

Thanks @JasonScott.

@tunaflyby, CAPEX is capital expenditures (anything that adds value to fixed assets).

...Yes in this area, You'd be lucky to get 1%.  Never 2%.

Thanks, @Nemmert.  

In this area (Boston), mortgages will almost always be more than 50% of rental income, so I'm not sure how accurate it is to use the 50% rule in this area.  I think this is where my concern comes in.  If I use the 50% rule, any property here would create negative cash flow.  

I am planning to manage myself, unless it is more hassle than it's worth.  I'll factor in that amount, just in case.

Thanks.

Thank you @tunaflyby and @qbguy02 !

Very helpful.

I am in the process of purchasing my first buy and hold investment property.  I have used the BiggerPockets analysis tools, which are helpful, but I'm confused on how to calculate true cost of owning a property.  I don't really know what the "50% rule" is actually covering (i.e. does it include mortgage and taxes, etc...?) and I'm not sure what costs I should be adding.

For example, suppose a property generates $3000 a month in rental income.   Tenants pay utilities.  Obviously I need to subtract mortgage, interest, taxes and insurance from the $3000, but how do I estimate additional costs that I will have to pay?  I can think of things like snow removal and occasional repairs, but is there a standard percentage that can estimate what that typically costs?  

Using my example, suppose I generate $3000 per month.  Mortgage P&I is $1800 per month and insurance is $100 and taxes are $300 per month.  Without considering anything else, cash flow is then $800 per month.  But what else should I add for my costs?  Perhaps assume maintenance costs are equal to (i.e. 20%?) of rental income?  Is there a formula?

Thanks.

Thanks, @mikehurney. Unfortunately, I can't make the event, but sounds worthwhile for future meetups.