Investment Property in Georgia | Need advice/guidance

[Akshay Bhaskaran]

Hello Investors,

I'm planning to buy my first investment property in Georgia (probably a SFH or Condo or TownHome). While I'm trying to crunch the numbers for my analysis, I'd like to hear from the experts here to see if my calculations are right:

(Context: I'd be taking a HE loan against my primary house to cover the down payment for this investment property)

1. Gross Rental Income = Rental Income/month * 12

2. Gross operating expense = Vacancy charges for 3 months (3 * P + I for mortgage and HE loan) +

                                                      Property management fees (12 months) +

                                                      Property tax (12 months) + 

                                                      Insurance  (12 months) + 

HOA (12 months) +

                                                       Maintenance/repairs 

3. Net Operating Income (NOI) = (1) Gross Rental Income - (2) Gross Operating Expense

4. Gross Financing Cost = 12 * P + I for mortgage and HE loan

5. NIAF (Net Income After Financing) = (3) Net Operating Income - (4) Gross Financing Cost

6. Cash-on-cash return = (5) Net Income After Financing / (Down payment + closing costs)

Now my question is this:

- I am already tallying 3 months of vacancy charges (no rent) as part of gross operating expense (2)

- So, in my gross financing cost (4) - should I put it as 9 * P + I for my loans (coz 3 months vacancy is already tallied in gross operating expense [OR] it should be 12 * P + I for one complete year)

[Jeff Fountain]

Hi Akshay,

Manage your own property unless there is a MAJOR reason you are unable to. You will save a ton of money and you will learn A LOT about real estate investing. Easiest way to market your property is throw it on Zillow, minimal fee and Zillow completes your backgrounds as well as makes your lease signing very simple. For repairs, network with friends for handymen or use Angi. Remember, don't make owning your first property a science project. If you have a nice property, you will not have a 3 month vacancy. My guess is it will rent within a month if not within 10 days. Keep it simple and keep moving forward. Note, I did not say, don't do homework. Keep it up. REI pays off!