How do you run your numbers?

[Brian R.]

I am finding myself in analysis paralysis! I do however want to make sure I am covering all of my bases. I wanted to see what categories of expenses you all plan for in your buy and hold strategies. I have been playing with:

GROSS RENT

-15% Vacancy

-12% Managment

-10% CapEx/Reserve fund

-13% Repairs

= 50% of gross rent

- PITI

= Cashflow

This is my first investment property, I'm looking in Rochester, NY mostly duplexes. Running my numbers like this shows around a 15% cash-on-cash return. I want to be conservative in my projections and surprised if things work out better.

Are there any other categories of expenses or contingencies I should be planning for?

How do you run your numbers when looking at a potential investment?

Thank you ALL!

[Joel Owens]

Vacancy tends to be lower than 15% in most areas. 12% management is high unless it is a rougher area requiring intensive time for collections etc.

Ongoing repairs and expenses are usually much higher than 13%.

As the buildings get larger the number categories will change some but will still come out close to 50% costs. For instance on large apartment building of say 50 units the management fee might be 5 or 6%.

If landlord pays utility I go 60% total costs and if landlord utility and a really old building then I have seen it average to 65% costs.