Originally posted by Cassidy Adams:
Thank You Simon Campbell,
Based on the current numbers I have attained, the gross income will be approximately $56,400 annually, After all expenses including utilities, PM, and taxes, I will be right around $36,000 before principal interest and insurance of course. On a $260,000 property mortgage and interest should be no more than $1800 depending on the financing. Which should put me in the ball park to cover the repairs and maintenance, as well as capital reserves and still make a decent profit correct?
Cassidy
Here's another way to look at it using dollars instead of %'s.
Using your numbers:
Gross Income: $56,400
Less 10% Vacancy: -$5,640
Effective Gross Income: $50,760
Less Expenses Excluding Insurance: -$20,400
Net Operating Income: $30,360 ($2,530/month)
Debt Service: -$21,600 ($1,800/month)
Net Cash Flow: $8,760 ($730/month)
Will $730 per month cover all of the expenses that you haven't included? i.e. insurance, repairs and maintenance, PMI (if applicable), reserves, etc.
Also FYI, an $1,800 mortgage on a $260,000 loan is a 7.4% interest rate assuming 30-year amortization.
