Or NOI could be understated due to capital expenditures being reported as operating expenses.

Here's what I discovered: Assuming a $200,000 purchase price with 20% down, 8% for vacancy, 10% for repairs/maintenance, 5% for capital expenditures (reserves for future big things) and 12% for property management (even if you plan to manage yourself, I always advise including this expense, because someday you'll be so big you can't manage yourself, and if you can't afford a PM today, it's not an investment you are buying, it's a job) this is what I discovered (it's not good) (If you can't read this, download the PDF here) Here are my thoughts. 1.)

You can deduct the expense, yes, but that is hardly, IMO, a "phenomenal advantage" as mentioned above ;) at least if you compare it to having an employer cover half of the expense or more.I have never had a job with benefits, and health insurance remains my single largest monthly expenditure.

So I was on Yahoo, and it said that Michael Phelps eats 12,000 calories a day.

I'm not going to send a check to a treasurer whose term expired and may not even own a unit anymore, without some idea of where the money is going and how it will be used.The commons areas need attention, but even if I got on the board and straightened things out, I doubt very seriously that I could get a majority agreement from the rest of the owners to make any major expenditures.

Research found that the appeal of this low calorie beer to heavy drinkers was not its low calories at all (most were proud of their beer bellies), but the fact that it didn't "fill them up" as much as regular beer - so they could drink more and stay in the bar longer.From my own experience of working in international book distribution and marketing, I know that many books are bought not [only] to be read, but as interior decoration or as a symbol of cultural sophistication.

But any one property in any given year could have a couple of one-time capital expenditures that will completely blow up your planned cash outlay for the year.So make sure you are giving yourself enough of a cash cushion just in case.

The only problem that I have with using my cash on cash return in year one is as follows: What if in Year 1 I have a large amount of Capital Expenditures that occur (small amount of rehab, paint, floors,fence) ?

Specifically for vacancy, repairs and capital expenditures?

In some ways not as critical from a business perspective, but you need to be able to keep your home livable and functional as well as your renters' units.If you estimate the remaining life of components, the cost of replacing them and then do the math amortizing the costs you can come up with a capex number and expenditure timeline.