Looking at my first rental property! Check my numbers? :)

[Jordan Wolfe]

Hello all, first off thank you for taking the time to read this post...

I believe I have found my first viable rental property and I was hoping that some of the more seasoned rental gurus would be able to take a look at the numbers and let me know if everything looks in order. To me everything looks like it will provide a good return on my rental property. This is a condo unit. Please see the numbers below...

Property is a 2 bedroom, 2 full bathroom condo unit. The unit includes a balcony and an in unit washer / dryer.

Assumed Value After Capitol Improvements: $125,000

Percent Down: 25% (Currently What My Lender Is Requesting) $31,250

Interest Rate: 3.5%

Rental Term: 30 Years

Buying Costs: 1%

Rental Rate: $1,500 ($750 Per Renter) - Includes Garage Parking, Washer / Dryer In Unit

Cap Rate: 14.40%

Vacancy: 8% Annually

Rent Increases: 2% Annually

Property Management: 6% (I plan to do most of the property management)

Maintenance: 1%

Move In / Move Out Costs: $2,000 (This is per vacancy change)

Mortgage Payment: $979 / Month

HOA: $317 (Includes - CAM, Lawn Care, Master Insurance Policy {does this mean I don't need additional insurance?}, Snow Removal)

After All Expenses for the first year I expect to pull in an average of $1,380 / Month Gross and about $401 / Month Net (after mortgage payment). Does this sound reasonable?

What about the fact that utilities are not included? 

I have a similar property for about the same price (Includes Two Parking Spots) but the HOA fee is $702 / Month (CAM, Exterior Building Maintenance, Heat, Lawn Care, Management, Master Insurance Policy, Reserve Funds, Sewer, Snow Removal, Trash Removal, Water) - Is this HOA fee too expensive even though it includes all those amenities?

*Land Value Is Included In Property

Please let me know what you all think and if I missed any details let me know and I can surely add them.

Thanks!

Jordan.

[Ali Boone]

I'm confused about a few things:

- "Assumed Value After Capitol Improvements"? Does that mean how much you are buying it for, or are you having to drop the money to make the improvements, and if so, what is the actual purchase price and amount for improvements? Not sure where you were going with that one.

- What numbers did you use to get to a 14% cap rate? I guarantee this isn't a 14% cap rate property.

- $401/month net...with that kind of condo fee...not possible. How are you getting to that number?