Single Family - Rent

[Jonathan Bolano]

Hello everyone, so I am in the process of considering renting my current home (which I updated) and purchasing a new one. I want the current one to pay for my mortgage and then some. After running all my numbers via the BP matrix in one of the youtube videos, I realized that I would have an income of $335/mt after putting aside 20% for Repairs (small and big) and 5% vacancy. None of the others applied to me. My ROI, however, would be 27%. I moved in in September 2017.

So my ultimate question is, knowing what you know above, what are your thoughts on Renting out a Single-Home. I understand there are some big time investors that say no because if you are Vacant, you are 100% vacant versus a 4 unit where if you have one floor gone, you are only down by 25%. 

Thank you in advance for all and any help you can offer.

[Andrew Kerr]

@Jonathan Bolano if all the numbers were run correctly, an ROI of 27% is pretty strong. I see nothing wrong with that. There are also tons of folks that have whole portfolio's of SFR and do incredibly well.

You might want to bump up your vacancy higher though. 5% means you are vacant for about one month every two years. You might have tenants that average staying much longer than that, but if you have one stay for a year, then you are down for 6 weeks for touch up and marketing, then you have another tenant come in and stay for a year then it takes you 6 weeks for the next tenant to move in, your vacancy would be around 10-11%. Better to be a little more conservative up front.