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Updated over 5 years ago,
Opinion on Rental Property to Start Investment Journey
Hey Everyone. As mentioned in the title, I am new on the rental property journey and am looking for input on two properties. Below are the numbers from the Rental Property calculators from BiggerPockets. I'd greatly appreciate any feedback on what is a better value, better one for a beginner, what to prioritize - monthly cashflow vs Cash on Cash ROI and anything else those with experience have to offer. Apologies for any formatting issues.
Property A:
Located in an ok area. Has tenant and will not have any issues renting out at the current rate. May need some minor repairs ($500) which I have calculated into the numbers below.
Purchase Price - 28,500
Down Payment - 5,700
P&I - 109
Operating Expenses - 273 (includes taxes, vacancy (5%), repairs (10%), CapEx (10%), Mgmt (10%), etc.)
Monthly Income - 475
Monthly Cashflow - $93
Cash on Cash ROI - 12.83%
Property B:
In a better neighborhood that has many families and is closer to stores and shops. Does not have a tenant currently. Need to paint interior and do other repairs estimated at $1500 - already in calculation. Is a larger up front investment, which I can afford but may be causing some hesitation from me.
Purchase Price - 75,000
Down Payment - 15,000
P&I - 286
Operating Expenses - 455 (includes taxes, vacancy (5%), repairs (10%), CapEx (10%), Mgmt (10%), etc.)
Monthly Income - 900
Monthly Cashflow - $158
Cash On Cash ROI - 10.00%