Help to understand cash flow

[Jasmine Claye]

what is considered a good return on a rental investment?

I am considering a deal but not sure if the numbers are decent to even bother.

Purchase price: $50K

Yearly rental income: 15K

Yearly HOA: $3K (all landscaping, HVAC & exterior maintenance included)

Yearly Taxes: $700

Yearly Insurance: $450

Yearly PI: $3960

Yearly Avg expenses: $1.5K.

Not sure how to calculate the vacancy.

Rental Income - HOA - Taxes - Insurance - PI - Expenses - Vacany Allowance? = 5390

5390/12 = 450 per mnth CF

What am I leaving out?

I plan on using 2 loans to purchase, as one loan will be an equity loan from another property, which I will use as a down payment.

What is a good percentage for determining cash on cash investment?

[Jasmine Claye]

Thanks for that info Jon.

I actually used a loan of 55K @ 6% interest to get the PI, as I initially considered 55K the purchase price.

What are the monthly legal duties that would be needed?

Using your formula, do you factor in taxes, insurance, expenses? Is that why you divide rent by 2?