Quote from
@Josef Hardi:
Hi Taylor,
I am by no means an expert investor. But I have done quite a few analysis using the BP tools. Here are my feedback:
1. Closing cost is typically 2% of the purchase price. Yours should be around $4,800.
2. I'm not sure if this property is for primary residence or investment, because the rate for 30 years conventional is now closer to 6%.
3. Just a note on rent income, it's good to cross check the number on rent-o-meter, but also try to call local property managers and see what is their assessment of that area. Including realistic vacancy rate. Also- depending on the area, you can check if there is rent control and what is a reasonable annual rent increase. Remember that your expenses is for the most part flat, but property tax, home insurance and utilities does increase in cost.
4. In regards to vacancy rate, check with the local property management if 3% that you have put is a safe bet or not. Some areas are closer to 5%.
5. In regards to CapEx, I normally put 5% unless I know that the roof is fairly new (under 10 years), as well as newer HVAC systems.
6. In regard to Property Tax, don't forget that the historical property tax will not apply to newly purchased property. There is a cap to property tax increase for the same owner. However, once they sold it, the cap will be removed and the new assessment will be based on the purchased price.
Hope that helps!
