[Calc Review] Help me analyze this deal

[Angie Shires]

View report

*This link comes directly from our calculators, based on information input by the member who posted.

Ok, this is my first time to use this calculator for an actual property I am considering...I'm not sure if I've done it properly. I would've said yes before running the numbers...but the numbers are saying no. Have I done something wrong or is this just not a good property. 

This is in a low rent town, it's a 2/1...even if I turned it into a 3/2 I could get $900 max per month. Is the rental rate the real problem? 

[Mike Bean]

So the percentages here definitely vary by location and age of the house and other factors but just a few things that stick out to me:

1. I analyze with 8% vacancy and you have 5% - 8 comes out to about one month of vacancy

2. you have CapEx reserves at 100% and Repairs at 75% - Keep in mind that these percentage are a percentage of the monthly rent and typically wouldn't be over 10-15%

Saying 100% capex and 75% repairs essentially means that every year you're going to spend 100% of your rental income on capital expenditures and 75% of your income on repairs. Watch some videos by @Brandon Turner to see what he uses for his reserves. It's a good base line and you can adjust to your area and your specific property.