Just an introduction. Just did my first deal.

[Kenneth Kuebler]

Greetings all,

Just wanted to introduce myself. Been a podcast listener for a long time. This is my first purchase. Although I intend to build my portfolio generally in the Delaware, Ohio and Columbus Ohio areas, my first buy was in the Goodyear Heights neighborhood in Akron. My daughter is finishing her first year at the University of Akron. The plan is for her and three friends to occupy the home. Her “rent” is what I’m not paying for her housing. Her three friends will be paying. $400/month each. So $1200/month in income and about $7,000/year in savings for my daughter’s expenses. That puts monthly income at about $1800, so $21,600/year before utilities, taxes, and upkeep/maintenance.  I’m paying utilities. Paid $94,500 for the house and expect to put in an additional $10-15k. Roof, all HVAC and water heater are new since 2019 and I’ll home warranty the house - primarily because I’m out of town. I think the house is worth about $115-125 after I’m done with cosmetics. I paid cash for the property. 

[Nathan Gesner]

Quote from @Kenneth Kuebler:

Welcome to the BiggerPockets forums!

Congratulations on the first purchase. Let's hope there are many more to come.

I highly recommend you learn what constitutes a good investment. I'm sure you understand some basic principals ($100,000 house that rents for $2,000 a month will perform better than one that rents for $800 a month) but you can increase your return dramatically  - and keep yourself out of trouble - by understanding some basic math.

For example, you anticipate $21,600 income. You have mortgage ($6,000), utilities ($6,000), taxes ($1,700), insurance ($1000). That leaves $6,900. Average maintenance costs are 10% of annual income, so deduct another $2,000 (older houses with teenage Tenants will cost more). Less than $5,000 remaining and you have to put on a new roof ($10,000), HVAC ($6,000), and water heater ($1,500). You could be operating at a loss of $12,500 your first year. Your second year won't have losses, but you will only earn around $5000. This means three years before you break even and maybe start earning a profit in year four.

Here's a guide that describes what good cash flow looks like and how to analyze a property.

https://www.biggerpockets.com/...

I suspect you paid cash so your numbers will be slightly different. However, that would lead me to my next point which is learning how to leverage your money to increase your return. Here's a basic explanation to get your juices flowing:

Assume a house costs $200,000 and rents for $1,500. The market appreciates 3% per year.

Pay cash for one house and rent it for $1,500. After five years you'll have earned $90,000 in rent income and gained $34,000 in appreciation.

Or...

Buy four houses with $50,000 down on each. Mortgage payment is $1,000 on each house, so you're essentially earning $500 per house or $2,000 a month. After five years you'll have earned $120,000 in rent income and gained $136,000 in appreciation. You've earned $132,000 more by splitting your money and leveraging it.