Getting ready to buy my first rental property

[Terry Fisher]

Hi,

Ièm getting ready to buy my first rental property and I wanted to do my due diligence exercise with you.  that way you can point my attention to things newbies like me dont see when they start out.

Hereès the details

It's a condo ( townhouse) 

3 bdrm 

1.5 bath

rented for 1050 a month, all included,  lease ends in couple months

price 95k

the ad says upgraded flooring, upgrades on bath ( not sure exactly what that means)

let's not forget condo fee 250 ( not sure what I get for paying this every month)

taxes : close to 1 k per year

what I'm trying to figure out if it's worth it to buy it at this price, after I pull new mortgage and put my 20% down. ( I already have a mortgage since two years and it's working like clock work) 

This is the calculation what I did so far:

Gross income per year : 1000 x 12 = 12000

Vacancy rate : % ( I dont know)  but I did a search and didn't find any vacancy in that neighborhood. I'll assume 10% and work out a worst case scenario

so this brings down the gross income to : 12000 - 1200 = 10800

Expenses:

condo fee : 250 x 12 = 3000 yearly

Insurance: 1200/ year

utilities:  3000/ year

total:  7.2 k / year

Net income without debt service:  10.8-7.2 = 3.6 k

Debt service:  

500 x 12 = 6000

Net income:  with debt service: 3.6k - 6 k = -2.4k 

this is what pisses me off, why this real estate agent would say, great for investors,  maybe I should give him a call. 

please need your feedback on how to proceed with this. thanks