All Forum Posts by: Rick S.

What all is included in Cash out of pocket when figuring Cash on Cash returns?

I am including, down payment, closing costs, rennovations, monthly mortgage / insurance / taxes while the home was vacant. Is this correct to do?

Thanks all for the comments. I am looking into South Florida - Miami and Ft. Lauderdale. The home is a 3BR 2 BA in an upper middle class area with great schools. So, I guess from what I read, CCR of 5 to 10% is fine based on my target area?

What kind of Cash on Cash return is typical for a financed, SFH in a blue collar area in FL? From things I read on this site, some people are getting 20 - 30+%... from my calculations I am seeing 5 to 10% on homes I am interested in. Am I missing something (see below figure)?

What kind of Cash on Cash return is typical for a financed, SFH in a blue collar area in FL? From things I read on this site, people are getting 20 - 30+%... from my calculations I am seeing 5 to 10% on homes I am interested in. Am I missing something?

I have a single family home rented and I want to make sure my cash on cash return calculations make sense:

Total Cash out (includes, down payment, renovations, closing costs) = 88,700

Expenses I include: Insurance, taxes, landscaping, pool maint, mortgage payment. Are there other expenses I should add? I don't seem to have any others.

Annual Net profit = 8,928

Cash on Cash return = 8928 / 88700 = 10.1%

Does this make sense? Also, what is a target cash on cash return people are getting or striving for in today's market? Any comments and thoughts will be much appreciated!!

I have a tenant prospect (family of 4) that need to rent my place out for 8 months because renovating their current home. After the 8 month term, the lease will go month to month until they move out.

During the screening it seems that the husband and wife carry a lot of debt, mostly mortgages and cars. They own their own business so the income is very low (I assume this is purposely done to avoid taxes). They earn money from their business about $60k combined and have another $62k in rental income. Their credit report is good, average scores are 688 and 705 (husband and wife). The history on all of their accounts is excellent, only 1 delinquency for less than 30 days.

How much weight should I give a good payment history versus debt load vs. income?

Thanks for the replies Steven and Bill..

Basically, it was a vacation home for us.. we purchased in 2010 and fixed it up and then rented it in 2013. We fixed it up in 2012 and had it on the market since Sept 2012 and got someone for a 3.5 month seasonal rental from 1/15/13 to 4/30/13. Trying to figure out how to handle this.

Try to verify what the PM is telling you... its not too hard to get some comps on rentals. If the PM is correct, just approach the person in a nice manner and say that its hard to carry a loss.. you've done it for 4 years but can't continue. You helped this person, so there should really be no hard feelings. You are well within your right to get up to market.

We made improvements to our personal property in 2011. We began marketing the property as a rental in mid 2012. Can we add the improvements made in 2011 to our cost basis for calculating depreciation?

So in other words, expenses related to land-lording and depreciation can offset GROSS rental income (not net income), correct? Any loss I have gets carried over and can be used to offset gains when the property is sold (generally speaking)?