1) Add 20% rental vacancy rate to your formula, if you still see even cash flow with that, then it's a deal.
It will still be positive.
$750x20% = $150
$200 - $150 = $50 each unit.
2) You should tell us where this town is, how remote that is, if it will enjoy demographic long term appreciation. Capital gain is still important. Rent increase potential is also important to project.
It is about two hours drive. I am going to check out the demographic trend of this town.
3) Local renter quality. Is it a slum? or in a okay lower-income area. You don't want to get into a slum, easy to get in, hard to get out.
This is something I need to check out too. Thank you for remind me. It is important to avoid a slum. But for a rent of $750 per unit in that region, the renters should be above average.
4) Property management cost.
If add this one part, the cash flow will become zero, if not negative. $50 cash flow by 15 units is $750 which probably not enough for a manager, even part time.
Reply- I haven't fully explored the deal yet
所有跟帖:
• regarding property management -montavista- ♀ (459 bytes) () 11/30/2007 postreply 11:26:51
• Hmm! I need seriously talking with the seller -va_landlord- ♂ (63 bytes) () 11/30/2007 postreply 11:29:45
• Act now! Get the property under contract -montavista- ♀ (127 bytes) () 11/30/2007 postreply 11:32:34
• Prop management cost is a big wild card -miat42- ♂ (0 bytes) () 11/30/2007 postreply 11:32:04
• nod nod 还有很多未可知的维修费用 -芦苇葱葱- ♀ (0 bytes) () 11/30/2007 postreply 11:35:14