All Forum Posts by: Jordan Hamm

Thanks @Jim Adrian

My wife and I keep going back and forth between managing it ourselves and having a property manager. I'd probably be leaning toward managing it myself because we'll most likely be within a couple miles of the original property and I'm fairly handy with a father-in-law who is a general contractor. The only thing that concerns me is tenant screening, lease agreements and whatnot but I have an uncle who his a real estate agent in the area who might be able to help.

The biggest pro for using a management company would probably be educational. I feel like we could learn a lot from them that first year or so.

I really like the idea of doing a 2-yr lease at first! Thanks for the tips!

I had the same question @Jeff Gates... Based on the articles I had read, it seemed like that was a pretty standard calculation. But it didn't seem right to me. It seems like I may be a little too conservative but its comforting to know others are skeptical of that number as well.

Thanks!

Thanks for reviewing everything @Walter Key! Ill double check the numbers, I know I was rounding a few of them. But I really appreciate you taking a look. $391/mo sounds a lot better than what I was coming up with.

Good point @Thomas D.... To be honest, I was more interested in using a property management company to take care of all the legal documents and rent collection (and evictions if things got ugly). There's NO way I spend that much in maintenance now, and I'm fairly handy and my father-in-law is a general contractor. I was trying to think longer term if I need to replace a water tank or furnace, etc. and had seen that 10% number thrown around a couple times.

Wondered if I could get some more experience REI eyes to look over my numbers. Something doesn't seem right—am I really not going to make any money?

I'm looking to convert my current home (7 yrs old) into a rental.

Current PITI: $983 ($11,796/yr)

Estimated Rent: $1900 ($22,800/yr)

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Principal: $254 ($3048/yr)

Interest: $350 ($4190/yr)

Real Estate Taxes: $276 ($3315/yr)

Management Fees: $2769/yr (listing fee = first months rent, $79/mo after)

HOA: $60 ($720/yr)

Insurance: $75 ($900/yr estimated 20% higher than current rate)

Vacancy: $2280/yr (10% gross income)

Maintenance: $2280/yr (10% gross income)

Income Tax: $3024/yr (gross income - PITI x 25%)

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So my rough estimates have $22,800 in gross income to $22,605 total expenses. If I assume my property management company has another renter lined up I may be able to reduce vacancy costs... but other than that, it doesn't seem like there's much wiggle room.

Is this a bad idea? Everyone I've told that my total payment is under $1k and could rent for $1900 has said I'd be stupid not to rent it out. But it doesn't seem like the numbers add up? Am I missing something? Or am I being overly cautious on a 7 yr old, turn-key property?

Thanks for your help!

Wondered if I could get some more experience REI eyes to look over my numbers. Something doesn't seem right—am I really not going to make any money?

I'm looking to convert my current home (7 yrs old) into a rental.

Current PITI: $983 ($11,796/yr)

Estimated Rent: $1900 ($22,800/yr)

--

Principal: $254 ($3048/yr)

Interest: $350 ($4190/yr)

Real Estate Taxes: $276 ($3315/yr)

Management Fees: $2769/yr (listing fee = first months rent, $79/mo after)

HOA: $60 ($720/yr)

Insurance: $75 ($900/yr estimated 20% higher than current rate)

Vacancy: $2280/yr (10% gross income)

Maintenance: $2280/yr (10% gross income)

Income Tax: $3024/yr (gross income - PITI x 25%)

--

So my rough estimates have $22,800 in gross income to $22,605 total expenses. If I assume my property management company has another renter lined up I may be able to reduce vacancy costs... but other than that, it doesn't seem like there's much wiggle room.

Is this a bad idea? Everyone I've told that my total payment is under $1k and could rent for $1900 has said I'd be stupid not to rent it out. But it doesn't seem like the numbers add up? Am I missing something? Or am I being overly cautious on a 7 yr old, turn-key property?

Thanks for your help!

Thanks @Linval T., I've checked out a few of them, but definitely have a lot more reading to do!

Great advice @Christopher Suh... I'll be sure to double check those numbers. As for your lender, I'd love to at least connect with him and pick his brain. Would you mind messaging me with his contact info?

Thanks for your help!

Thanks for the prompt replies @Account Closed!

Good news is a model exactly like mine (and with finishes that aren't as nice) just rented for $900 more than my PITI... not too shabby right? The only thing holding me back is trying to figure out lending for my next property—I probably wouldn't have enough for a conventional mortgage on a second property. So it may have to wait a couple years as we save up a bit more.

Good tip on insurance... any ideas on how to get connected with a local REI group? Some groups on here maybe?

New to BP and REI in general... Art director for a tech startup by day but am looking to get started in REI by transitioning my current property into a rental. Any tips or suggestions on how to get started and what to keep in mind?

Thanks for the help!

I've lived in my current property for 6-7 years now and I'm interested in converting it to a rental. There is another home in my neighborhood thats my same model renting for $900 more than my PITI. So it seems to me that I could make a decent profit renting it out.

So my question is how do I get approved for another loan since my family and I would obviously have to move? My current property has about a 70% LTV and I have about $50k in equity. I probably wouldn't be able to afford a down payment for a conventional so what would you guys suggest? Should I just stick it out a couple more years and continue to save for a down payment on another property? Or are there other types of financing options that I might be able to utilize since I'd be carrying two decent mortgages?

Any help/suggestions would be greatly appreciated!