You didn’t mention how much of a down payment you were making and I didn’t see Cost allocation for vacancies, CAPEX, or maintenance.

The second option carries risk because they may end up paying for more than a month of vacancy if I have a hard time finding a new tenant.It is worth spending some time to research what other property managers in your market are doing and then develop a written policy.

This is local.I use 8% vacancy in my underwriting.Bump CapEx and repairs to 15% combined.Did you verify the water/sewer expense with the city?

All you have to do is adjust your analysis accordingly vacancy rate will increase debt coverage ratio requirements may increase as well as interest rates.

I'm not sure you're calculating everything correctly.Assume about 50% of the income set aside for expenses (taxes, insurance, utilities, maintenance, capital expenditures like the roof, vacancy, etc.)The remaining 50% is applied to your mortgage (principal and interest).Anything left over is your cash flow.Use the BiggerPockets calculator to run the numbers and see if it works.Have you considered a house hack?

The total income $68,000 (including rent, laundry, etc)Vacancy: $5,440 (8%)These expenses are the "real" numbers given to me.

Are there any vacancy fees in it? 

Of course, you have to wait for a vacancy.

A house hack (duplex) is basically an investment property with 50% vacancy, not paying yourself market rent.

Your %s for vacancy, maint, and capex are low.