First Time Rental Property Investor - Baltimore Rowhouse

[Kenneth Cheston]

Happy Holidays!

I'm looking to get my foot into the game by purchasing a "turn-key" townhouse in the affluent areas of Baltimore. Here are some of the key factors. Looking for feedback especially if you are a Baltimore investor! Thanks in advance.

The Deal:

Purchase Price: $200,000

Down Payment: $30,000

Closing Costs: ~$10,000 (points, premiums, escrow, etc.)

Loan Amount: $179,000

Interest: 3.625%

30 Year Mortgage

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The Margins:

Assumed Rent: $2,000

Monthly Expenses:

P & I: $983

Insurance: $33

Tax: $90

Maintenance: $200 (10% of rental income)

Vacancy: $166.67 (One month's rent annually)

CapEx: $100 (5% of rental income)

Total Expenses: $1,572.67

NOI: $427.33/month

*Zero utilities as these will be charged to tenants. There are no fees for trash in the Baltimore area.

[Tim Jacob]

200k turnkey will not get you A grade in the city or county. You will definitely get an updated C grade for maybe a little less but not much. Thus factor unreimbursed utilities in the city it could get you more. Capex go by $75/ month not a percentage. For the other parts making expense generalizations can lead to higher inaccuracies than looking at more of a case by case basis. What are you allocating for property management. I would go atleast 7% and most places charge more. I would allocate 10% to be conservative on that. 1 month vacancy is fairly high but might be a fair # if leasing fees are factored in. Otherwise I would say 5%.