Advise on Buy and Hold rental numbers in Benicia CA

[Sharon Wang]

Hi - this is my first post on BP. I've been seriously contemplating purchasing this 2bd/1ba condo in Benicia. Purchase would be at $170k, given price of other condos in the East Bay Area, I feel this is a pretty good deal. I would put 50k down and borrow 120k at 4.1% for 30 year fixed. In the end I would net about $73 / month. Looking at the numbers would you consider this an ok investment, with the intention to sell within 5 - 7 years? This would be a bet on appreciation as just 5 years ago, this same condo sold for less than 70k. Any advise would be greatly appreciated.

Thank you,

Sharon

Monthly Rent	$1,450.00
Property Tax	$175.00
Insurance	--
Property Mgmt (6%)	$87.00
Mortgage	$580.00
HOA	$410.00
Vacancy (5%)	$62.50
Repairs (5%)	$62.50
TOTAL EXPENSES / MONTH	$1,377.00
NET	$73.00

[Hank A.]

I'm assuming the HOA includes insurance. You could lose money when you add in a very good chance there will be some major capital expenditures in the next 5 years. HOAs often will decided to replace a roof of repair something major and all members have to pay. They also often increase monthly/yearly dues. This only makes sense if you are beyond certain of appreciation. Remember prices did fall in CA during the 2008 crash. Have you figured taxes on the capital appreciation? Overall sounds risky...