First Analysis of Buy and Hold

[Aaron Humerickhouse]

I found a piece of property to practice on, now granted this is the listed value on Zillow so I understand it may not be a realistic property to practice on, but the numbers should flow pretty similarly.  I'm looking at buying and holding.  This is one that wouldn't require a lot of rehab work upon entry, I've allowed for $4000 to spruce it up a bit.  The property is a 3 bed, 2 bath in a region that rents for $1400 based on Rentometer.

Have I included everything I need to in order to properly evaluate this property?  I've allowed for 12% of the rental income for property management, 10% for repair values, 1 month of rental income for vacancy, and $182.75 for Cap Ex based on this blog post.

With a negative cash flow of $5,575 and an upfront cash payment of $50,550 I'd be looking at a -11% cash on cash.

Purchase	$190,000.00
Interest Rate	4%
Years	30
Down Payment	$38,000.00
Improvements	$4,000.00
Closing Costs	$8,550.00
Total Upfront Cash	$50,550.00
Income Stream 1	$1,400.00	Monthly
Total Income Monthly	$1,400.00	Monthly
Property Taxes	$2,000.00	Annual
Insurance	$1,000.00	Annual
Lawn Care	$100.00	Monthly
Mortgage	$907.09	Monthly
Total Fixed Monthly	$1,257.09	Monthly
Vacancy	$116.67	Monthly	1 month
Repairs	$140.00	Monthly	10% of rental income
Cap Ex	$182.75	Monthly	https://www.biggerpockets.com/renewsblog/2015/10/13/real-estate-capex-estimate-capital-expenditures/
Property Management	$168.00	Monthly	12% of rental income
Total Variable Monthly	$607.42	Monthly
Cash Flow	-$464.51
Yearly Cash Flow	-$5,574.07
First Year Cash on Cash	-11.03%

[Aaron Humerickhouse]

Thank you for the responses.

@Derek Kirkwood, you're absolutely right.  Thank you for calling that out.

@James W., I didn't even think about the difference between owner occupied and non-owner occupied mortgage rates.

@Jordan Moorhead, I appreciate the offer.  I'm still working on internalizing some of this, when I'm ready I may reach out.