All Forum Posts by: Alexander Stromberg

I was mostly just trying to determine whether or not these numbers were accurate, or if I was doing too much or too little work on analysis. Any feedback on the work that I did here would be greatly appreciated.

Haha. Wow. I guess I was misunderstanding the work involved. Do I just make a general estimate for capital expenditures when I'm analyzing a buy and hold property, then?

@Karen Rittenhouse I was mostly doing this as practice, trying to come up with correct operating costs. I basically went through Brandon turner's 4 square analysis to try to see if the property would cash flow. My biggest question was whether I was properly estimating capital expenditures correctly or not, as it is frequently harped on as a deal killer, at least on the podcasts. I estimated up what I thought were all the correct things to think about when analyzing a deal, and determined that it would NOT cashflow. I was hoping that someone would be able to point out any errors, or let me know if I'm just wildly off the mark on how an analysis goes. I figured since my parents already own it I'd check to see if it was already a deal, and then just change it from a home residence to a rental property, if the numbers worked out.

Does that clarify the post?

My parents were preparing to sell their home in Bridgewater, Virginia, so I decided I'd run an analysis on it to determine if it would cashflow if, instead of selling, they rented the property out. These are the numbers I got estimated for it. Would anyone mind weighing in and letting me know if my estimates are good?

It's technically two single family homes on the same lot of land, but they cannot be separated into two parcels because they are too close together.

https://www.zillow.com/homes/for_sale/218610897_zp...

This is the listing for the house. The mortgage with taxes and insurance is $1322/month.

Comparing similarly sized 2 bedroom SFHs for rent, I came up with $0.81 to $0.89 per square foot for calculating rental income. I used the $0.81 for my rental calculation, and rounded up to 2000, due to the fact that its located a bit farther away from the primary rental markets, as it used to be a farm property back in the day.

I'm estimating 1% of the property value for general maintenance, an 8% fee for property management, and an 8% vacancy rate. The totals come to:

Which would indicate a loss of $257.89 per month. Are there any expenditures that I left out? Am I over- or underestimating any of the costs? Is it likely that I could achieve a higher rent? I've also considered looking at it as an Airbnb property, but my education on that has been minimal at best so far, and I am unsure how successful it would be. To my understanding, there are a large number of wineries within an hour of the location, which may make it a desirable short term rental for vacations or romantic get-aways.

@Beau B. Bray Welcome to BP! I'm out of the Charlottesville area and recently introduced myself as well, with a similar starting plan. There is certainly a wealth of information here. I'll be attending my first real estate meetup tonight. Hopefully that will be great for education. Several of the podcasts suggest it as a strong beginning step. Maybe someone can offer a good meetup for your area?

Found two things on my own. Landlord insurance is apparently 20% more expensive than homeowners insurance, raising that to 960 per year which raises the mortgage/insurance payment from 1322 to 1335. Additionally, I left out vacancy. I'm not entirely sure how to figure this out for my area, but I recall hearing in a BP podcast that the national average is about 5 or 6%. Since they're a ways out from the nearby towns, I raised it to 8% for my calculations. that number then is 160. That brings the total expenses to $2495.39, and a monthly loss of $495.39.

My parents were preparing to sell their home, so I decided I'd run an analysis on it to determine if it would cashflow if, instead of selling, they rented the property out. These are the numbers I got estimated for it. Would anyone mind weighing in and letting me know if my estimates are good?

It's technically two single family homes on the same lot of land, but they cannot be separated into two parcels because they are too close together. 

https://www.zillow.com/homes/for_sale/218610897_zp...

This is the listing for the house. The mortgage with taxes and insurance is $1322/month.

Comparing similarly sized 2 bedroom SFHs for rent, I came up with $0.81 to $0.89 per square foot for calculating rental income. I used the $0.81 for my rental calculation, and rounded up to 2000, due to the fact that its located a bit farther away from the primary rental markets, as it used to be a farm property back in the day. 

I'm estimating 1% of the property value for general maintenance. I'm using 8% fee for property management.

The totals come to:

Which would indicate a loss of $322.39 per month. Are there any expenditures that I left out? Am I over- or underestimating any of the costs? Is it likely that I could achieve a higher rent? I've also considered looking at it as an Airbnb property, but my education on that has been minimal at best so far, and I am unsure how successful it would be. To my understanding, there are a large number of wineries within an hour of the location, which may make it a desirable short term rental for vacations or romantic get-aways.

The FilePlace is free as well. I found about 20 different calculators there. I haven't really had the time to wade through them all yet. I'll take a look and compare the ones I found and then post my favorites.

Signing up now then!