Ok - I looked a little deeper, and I'm starting to have a few more questions.
You stated $400+ per month cash flow - since I came up with almost $300 in my initial look, I didn't really think much of the difference.
After looking a little more, I started thinking that you might be skipping a few expenses:
1. Are you including a maintenance savings?
2. Are you including a CapEx savings?
3. What vacancy are you assuming?
4. Are you planning to manage it yourself forever? What PM percentage are you setting aside as an expense? Is your time worth some money? What if you decide to pass management to someone else later down the road?
5. Are you including your own electric bill, or is there a third meter for the "common areas"?
So some quick math to explain where I'm coming from. Let's say you get a second tenant, and your total income goes to $2,400.00 per month. My assumptions are as follows:
Annual Property Tax: $4,000
Annual Insurance: $1,000
Annual Utilities (someone has to pay sewer / trash): $1,000 (which is really low)
So annual expenses are $6,000 which is $500 per month.
Mortgage is $927.70 per month, which brings your expenses up to $1427.70 per month
Now let's add in the "percentage expenses"
Maintenance: 10% of income ($240 per month)
CapEx: 10% of income ($240)
PM: 10% of income ($240)
Vacancy: 8% of income ($192)
Total percentage expenses: $912.00 per month
Total expenses: $2,339.70
Now, if you want to make the cash flow look good you can take out PM. You can also ignore Maintenance, CapEx, and Vacancy if you want, but you'll put yourself in a bad situation if you get an extended vacancy or if you have to replace the roof, siding, water heaters, etc.
While you will still cash flow, it will be a lot less than $400 per month unless if you take the risk and don't set aside savings for maintenance and CapEx.
You may have included those in your numbers, but if you did I think we arrived at different conclusions (or I'm missing something)
Food for thought!
