Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 54%
$32.50 /mo
$390 billed annualy
MONTHLY
$69 /mo
billed monthly
7 day free trial. Cancel anytime
×
Take Your Forum Experience
to the Next Level
Create a free account and join over 3 million investors sharing
their journeys and helping each other succeed.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
Already a member?  Login here
Starting Out
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 7 years ago on . Most recent reply

User Stats

3
Posts
0
Votes
Dan Piercy
  • Ann Arbor, MI
0
Votes |
3
Posts

1st Rental, Current Homestead - Advice needed

Dan Piercy
  • Ann Arbor, MI
Posted

Hi All,

I am looking for advice we are looking into investing some money into our first rental and at the same time are looking for a bigger house for ourselves.

With this in mind we are considering keeping our current house and making this our first rental possibly in the future if we wanted to downsize we could return as we really like the neighborhood.

Our objective is long term investment to supplement out 401k’s although likely along the way we will need a balance between cash generating property and appreciation driven.

So Financials

Original Purchase price $300K in 2014 (Estimated current value $330-340k)

Deposit 20%/$60k

Interest Rate 3.75%

There is $200k left on the mortgage

I am using a excel rental calculator and I am using the original purchase details without updating for the reduced mortgage or higher appraised value as that seems to complicate.

Assumptions:

Estimated Rent $2300 p/m (Based on zillow and comparables)

Vacancy Rate 10%

Property Taxes $8800

Insurance $1200

Maintenance/Repairs $2000

Utilities $600(This was to include mowing services)

Advertising $250

Annual Expense inflation assumed at 2%

Property appreciation assumed 3% (This might be conservative Ann arbor has been 4-5% for last 5 or so years)

The property calculator gives me -2% return on cash but 16% return on investment.

Based on this what advice would you give me or watch outs?

Thanks

Dan

Loading replies...