All Forum Posts by: Muhammad Afzal
Muhammad Afzal has started 1 posts and replied 3 times.
Post: Would really appreciate feedback on this property
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Originally posted by @Jonathan Greene:
Those numbers don't work at all and don't look to increase a ton over time. If you have one major expenditure in the first four years, all of your cash flow will be gone. I would not keep it.
Thanks for the input Jonathan. I have read situations where people actually have been doing rentals only to get cash flow of $100/mon, so I wanted to get some broader opinions on it.
Post: Would really appreciate feedback on this property
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Originally posted by @Aaron K.:
Those property taxes are high I'd guess this is something like a $350k property built relatively recently with a ton of Mello Roos? Doesn't seem like a great investment probably better off selling and buying something else as an investment if that is the way your parents want to go.
Thanks for the response Aaron. I had not heard of Mello Roos until now, but this is not the case here. This is actually a $145k property built in 1955 that was bought back in 2009 and evaluates for about 165k at the moment in the market. Town assessed value is at 185k.
Post: Would really appreciate feedback on this property
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My parents want to move to a bigger house to accommodate our needs in the next year or two as our family is growing. Rather than selling the current house, I have been thinking of alternate ways to make use of this property to generate a side income stream.
Here is where it gets a little tricky. From my initial analysis, I don't think the it would make much sense primarily because the property tax to rent ratio is too high to generate a healthy cash flow. I would like to get others opinions on this.
This house is located in South Jersey area. 3BD, 2BTH, FB
- 1382 sq ft living area. 7000 sq ft lot.
- Mortgage balance remaining is $112k
- Monthly payment: $1250 (PITI)
- 2019 property taxes alone were $7000
The going market for similar property is 1600-1800. Based on a rent of 1650, cash flow would be just below $900 for the first year after taking out 20% of the gross rent for expenses/maintenance. This would increase over time, but is this starting cash flow worth the headache that we hear so much about for landlords?
Forecasting 10 years: expenses set aside for be approx. $40,000 (whether that gets used or much it gets used would be up to me) and cash flow accumulated would be approx. $17,000.