Hey Elliot Jones besides all of the things around making sure you find a place in an area that has some possibility for price appreciation, I would caution to be very conservative on your projected incomes and expenses.

Taxes 7%Insurance 9%Xtra Flood Insurance 9%Vacancies 5%PM 10%CapEX 5%Repairs Tenant Damage 5%From total purchase price:Down Payment is set at 25%Closing cost is set at 1%Rehab Budget 1%Are my percentages on the conservative side?  

Having no experience, I've been analyzing based off numbers and percentages I've either heard on podcasts or tried to be as conservative as I could.  

I'm pretty conservative by nature, but would hate to overestimate the profit potential.

It should conservatively rent for around $800 per month.  

I’ve got the age old question of whether we should sell our townhome or keep it and make it our first rental.This is my first post on BiggerPockets so please let me know if I have left out any information that may be helpful in the analysis.Single Family TownhomeBuilt: 2001Purchase Date: 2008Purchase Price: $270,000Property Tax: $5700/yearHOA: $125/monthWater/Sewer: $1320/year (Must be paid to county by home owner)Insurance: $800/yearMaintenance Costs: $400/year Other planned future costs: Roof (in about 5 years, ~$5000), water heater (in 7 years, ~$1300 including labor), water softener (in 5 years, $500)Current Mortgage (Refinanced in 2012)Term: 15Rate: 3.375%Principal: $140,000Market Value: $230,000 (Upstate NY market with minimal appreciation expected)Rental: $2000/month ($2200 possible but I want to be conservative)I was also considering refinancing to a 30 year mortgage to help with cash flow but I’m not sure if it is worth the $4000-5000 in closing costs to refinance.Normally I would not consider this a good rental property because of the low/negative cash flow.

To be conservative, plan another 10% for maintenance and 10% for vacancy.

I also did a 1031 exchange so I was conservative in my negotiating because the tax defferal outweighed the savings.

Fortunately I took a step back, implemented a number of things that would conserve heat and water, and I am far better for it because the old costs were built into the rents.Now, I live in a house whose water is controlled by a utility and I receive monthly bills like electric and stays with the tenant.

My numbers tend to be conservative so that my clients make money EVERY deal (not to mention, set new price precedents).Cheers,Leslie BandyCA BRE: 01990425