Well just expenses with upkeep .....a 40 yr old place or a brand new one for the same mortgage payment .....

"Your comment about less wear and tear on retail does not seem applicable as retail units usual have NNN tenants in that they are responsible for ALL the interior maintenance and upgrades they desire" Did you mean they don't like paying for the upkeep so it looks more run down or since they pay the upkeep they keep it better looking?

we have this in my town also $65 a year and they do an outside inspection onlyit is total crap and just another way to soak us "rich " landlords,,, if they were truly concerned about rental up keep they dont need a yearly inspection for that code inforcement officers go around marking up fines all day long on any house especially bank owned vacant houses they know it will have to be paid by the bank before it can sell

He sadly has no of that and only brings hard work, a brain and the will to go through a start up with me to the table.My guess is that the weight both the expected cash flow of the business model and liquid assets you currently have (cash, stocks..etc).

But those  house will be old, so even if they cash flow, the upkeep and repairs may eat up the cashflow.or2) Would you buy a couple of houses that will  break even (or may even have some negative cash flow) in a cyclical market (Phoenix, Florida)? 

I’m doing the light weight work and restoration details, structural issues and the roof are being handled through a contractor out of the construction loan.  

The property will have less expenses for upkeep with an on-site manager upholding house rules (so definitely won’t be having house parties and drawing negative attention from neighbors or law enforcement)and taking care of small fix problems that arise.

Asking Price 215000 Primary Inputs Purchase Price($) $ 190,000.00 Downpayment(%) 3.5% Units(#) 2 Monthly Rent($) $ 1,150 Occupancy Rate 75% 30 Year Loan Rate(%) 4.50% 15 Year Loan Rate(%) 3.90% Secondary Inputs Closing Costs(%) 6.0% Property Tax(%) 1.8% Insurance(%) 0.8% Maintenance(%) 10.0% Property Management(%) 10.0% Improvements($) $ 20,000.00 Closing Costs($) $ 11,400.00 Inspections/Misc($) $ 600.00  Value (30-Year Mortgage Scenario) Monthly Rent $ 1,725 Annual Rent $ 20,700.00 Value Per 2% Rule $ 86,250 Value Difference (2% Rule) $ (103,750) Annual NOI $ 13,800 ROI (Pre-Tax) 8.36% ROI (Post-Tax) 8.1% CAP Rate (50% Rule) 7.3% CAP Rate (Assumed Expenses) 6.0% Annual Expenses Annual Property Taxes $ 3,420 Annual Maintenance $ 2,070 Annual Insurance $ 1,520 Property Upkeep/Other $ 200 Property Management $ 2,070 Total: $ 9,280  30-Year Mortgage Results Money Down $ 38,650.00 Monthly Gross Rent $ 1,725.00 Monthly Loan Pmnt $ 929.01 Effective Rental Income $ 20,700.00 Annual Loan Pmnts $ 11,148.09 Annual Expenses $ 9,280.00 Total Expenses + Loans $ 20,428.09 Annual Cash-Flow (Pre-Tax) $ 271.91 Annual Return (Cash-Flow + Equity, Pre-Tax) $ 3,229.76 Annual Post-Tax Cash-Flow (Pre-Tax) $ 190.34 

Have to weight the relative importance, just like in many other business decisions.

Homes always need upkeep - there's wood rot, AC low freon issues, appliances - I drive our homes 2x per year looking for "things".