I think the 12k really makes the risk go higher in case something goes wrong that is unexpected..Using the MAO formula215x.7-35k = 115k but I don't think this is too realistic..

@Jon HoldmanI appreciate the kick in the as*, this made me realize I should factor a larger portion of my proceeds to the "UN-expected".I have to agree, some years you do have it great and some you dish out a TON of money.

Myself, I am looking to retire soon so I approach it more conservatively than I would have 20 years ago.Whatever direction you take, make sure you leave lots of cash reserve to cover that huge unexpected expense that will hit at some point.

If you know what you are doing and follow some pretty well proven strategies (you can learn them all here and in a few good books) that you understand before you jump in, you can always scrape a knee or get an unexpected nick or cut, but you won't break a leg and get seriously hurt.

Next time they call, they've had some "unexpected expenses" come up, and now they have 4 to 4 1/2 months rent available, and still don't see the need to fill-out a credit/work history application.

So all I knew was, what I could and was willing to afford I saw the numbers in front of me....There were NO unexpected dollars needed simply because the car was fully under warranty, my maintenance was include in my payments.Buying a pre-owned vehicle leaves room for the never-ending surprise repairs and or maintenance....

The water is actually not separated from us so we know the water bill - ~$60 for both town homes.Therefore, monthly cash-flow without unexpected expenses would be $370-$920.

I guess my question, if asked another way, would be what types of jobs/repairs carry the most risk of unexpected costs.

Your estimated Capitalization Rate would be about 6.7%.Make sure that you have sufficient cash reserves for unexpected repairs and expenses.Make sure that each month you deduct the following expenses from your rent and save them for future payments: (1) real property taxes, (2) replacement reserve and (3) insurance reserve.For your information, the 50% rule, which is generally considered to be fairly close to actual expenses, states that …50% of your gross rents will be taken up by expenses... property tax insurance vacancy property management maintenance capital repairs legals and accounting, etc.From the remaining 50% you service your debt, if any, and the remaining is your profit.

Hi Scott, A significant advantage of the LLC is the limited liability protection it provides for landlord & other situations in case the completely unexpected happens (accidents or injuries causing medical bills, etc.)