My first invesment Property - Analysis needed

[Nilay Shah]

Been reading this forum for a while and am excited to finally make my first post. I recentlty purchased my first investment property. I closed on 10/15. It is a 2bedroom, 2 bath condo in a nice community - Wanted your opinion on the deal. It was a short sale property.

Sale Price: 174,000
Repairs & New Appliances (renoved entire kitchen) - 12,500
Closing Costs: 1,492
HOA Payment for Previous owner: 1,175

Acquisition Cost: $189,167

-----------------------------------------------------------------
Mortgage: 120,000 - 30years. 3.45%
Down: 54,000 (i put more down because i had the money sitting in a low interest savings account)
-----------------------------------------------------------------
Income: Rent: $1750/month

Expenses:

Mortgage (Principal + Interest): 535.51
HOA: 210
Taxes: 357.25
Insurance: 19.17
NJR Furnace Service: $50 (purchased since i dont live near the area)
Total Expense: 1,173.93

Income - Expense = 578.07 x 12 = 6,936.88

ROI = 10.03%

Thoughts?

[Cuong Le]

Hi @Nilay Shah and congrats on your first house. I usually do 8.3% for vacancy which is one month out of the year but you can be conservative and make the math easy by doing 10%.

It's great that all the items are new but a 10% of the rent for maintenance is recommended. Some people put more but it's up to your risk tolerance.

Assuming you will self manage this property, still a good idea to allocate 10-12% for property management. When you blow up and have lots of houses and you want to get a PM, you have some wiggle room to get one and still have positive cash flow.