Houston Property Analysis (First)

[Aaron Krawitz]

I have yet to take steps on investing as I'm taking the next 6-12mo to read and absorb as much information as I can. That said, I'm running my own numbers on cash-on-cash ROI and I wanted to make sure I'm looking at these correctly. Please let me know if I'm not including any expenses or missing something key.

Property Details:

- 3 / 2, 1374 sqft, $89k asking

Expenses ($802)

P&I: $369

Tax: $188

Insurance: $70

Utilities: $50

Vacancy: 5% ($62.50)

CapEx: 5% ($62.50)

Total Investment (Down Payment + Closing + Repair) = $25,499

Rent = $1250

Cash Flow = $448

Cash On Cash ROI = 21.08%

This is a single family home in an area where I've competitively estimated the rent (Most units running between $1150 and $1450). I'm having the hardest time determining estimated utility costs (water). However even if I increase utilities, vacancy, capex by 5% all around, I'm still near $300/mo. As a side note, I would be managing this property myself and not running it through a PM.

[Cody L.]

Water on a SFH rental will be paid for by the tenant (as will/should all utils)

You should still calculate PM even if you want to do it yourself.  Nice to know how a property will do if/when you don't manage.  Consider it your 'income' for managing.

I charge all my properties ~6% management as that becomes income for my 'management company' and that $ pays all of our property managers, our operations staff, our office building, phones, software, etc.   It's just good practice.