First Beach (condo) Rental Property only 4% CoC?

[Account Closed]

Good morning, everyone.

As stated in the title, I’m considering purchasing a turnkey beachfront studio within a condominium as one of my first rentals, and wanted to hear everyone’s opinions on the numbers.

I was pre-approved for $170k with 10% down with a 30 year fixed at 3.125%.

-Purchase price (with seller paying closing costs): 155k

-Annual gross revenue: 21k

-HOA: $4,080/annually

-Maintenance: 10%

-Management: 20%

-Utilities: 2%

-Insurance: $1000 annually

-Taxes: $800 annually

After all numbers were ran through different calculators, my Cash on Cash was only 3-4%, NOI being around $7,600, and total net profit $3,400 annually.

To me, this number sounds extremely, extremely low.

However, with inventory being so low in my local market, I’m willing to jump on something with much less return, rather than staying in the stage of analysis paralysis.

If a certain figure doesn’t make sense, I’m more than happy to go into detail.