Rent Allocation For A Property

[Duane Hundley]

I purchased a 2br 1b home and have a renter in place to move in Sept. Please help me break down where the income from the property should be put? Here are the numbers. Purchase Price $22,000 Loan amount (purchased with cc 4% fee 0% 12 months) Then 10 year loan or transfer to 0% and maby use credit union card I have at 7.99% $25,000 PIT $250 during first year on a 10 year payoff schedule Rent $500 first year no increase Tax value $31,500 Repairs expenses (Roof 5-6 years) only major repair noted during inspection $3,000 How would you all direct the $500 in rent? I know around $41 a month for insurance and taxes. I was thinking $50 for the roof replacement on a 4 year schedule. Please let me know what you think or what you would do different? I also was thinking of paying extra while in the first year for 0% (4% fee) window but I want to take some profits from the property. Thanks!

[Ned Carey]

You question is a little confusing but I think you are asking is how much to put aside for reserves. I would put it all aside until you had 4-6 months of expenses. A more sophisticated way it to create a reserve chart. 

A water heater is $600 installed and lasts about 10 years.  So that water heater is costing you about $60 a year. Of course if it is 5 years old it is costing you $120 a year. Do that for every component of the property and you have the amount you need to set aside every month.