Originally posted by "joelhusvar1":
A quick example for what I'm working with
2 unit
asking price $43,000
the rents are $495 down and $450 up
fully rented tenants want to stay
I think you need more information here...
In terms of income, what vacancy rate do you expect? To determine this, consider the local vacancy rate for duplexes, how long the tenants have been renting those units, how those rents compare to average market rents for similar places, etc. Additionally, is the town where this duplex is located improving or declining in terms of rents and vacancies?
You didn't include any expense numbers. Are you going to manage the property yourself? What about maintenance/repair costs? Is there deferred maintenance from the previous owner? Advertising costs? Utilities? Landscaping? Are taxes high or low for the area? Is insurance how or low for the area?
What about your financing? How much will you be able to put down? What type of loan will you be able to get? At what rate?
Once you have all this information, you should use these numbers to calculate your NOI and your cash flow to see if you'll make money or not. And remember, if you're cash flow is small, you need to account for large recurring expenses (like a new roof, appliances, etc) and ensure that you have funds to cover those.
