We are closing this week on a new home for my wife and and I, and it is a 3/2.5 townhome for around 138 that needs a good bit of updates. Updated units in this complex are selling for around 160, and we are looking to do around 20k in renovation to it including all new appliances, hardwood floors, quartz countertops, and the bathrooms. The goal isn't to make money on the renovation. We wanted a home in this complex and are going to be able to make this one exactly what we want for the same price. That being said, I have to go to another city for my first year of rotations in about 18 months, and we are considering renting the unit out during this time. I wanted to hear everyone's take on both our expected expenses and how much work this will be, being that I will have a pretty tight schedule. I would be using a PM. Here are the numbers.
60k in the property after renovations.
Expected rent: $1500-1800
Expenses:
Mortgage/Tax/Insurance: $520.20
HOA: $300 (Includes trash, structural insurance, pool, and tennis court)
PM: 10%: $150
Cap Ex: I'm unsure on this. We will have brand new appliances throughout and are only responsible for studs in structurally.
Maintenance/Repairs: 1% ~$135
Vacancy: The goal here would be to sign a single year lease and move back in at the end of this, but to be complete, 1 month's rent, $125
This comes out to $1230.20 in expenses giving ~$270 in cash flow based on the low end of my rent estimate. This comes out to a 5.4% COCROI, which I think would be pretty good being that the goal for us is to cover property expenses for a year until I can move home. What do you all think? I don't want to get in over my head, which is why I think the PM would be the best route here.
This is my first post here. This will be the second property that I have renovated, we do all of the work ourselves, but I have never rented a property. After I finish medical school, I want to work my way into large multifamily rental properties. Any comments are appreciated.
