My biggest challenges have been getting the tenants used to my management style (much more rigid than the last owner), a nasty pest invasion and an immediate vacancy in the unit of a 6yr tenant who apparently had something against even basic cleaning.

In my past dealings I always include an 8% line item for property management in addition to my 10% for vacancy and 10% for CapEx/Maintenance.

Conversely, you look at a similar property in Denver and you would be lucky to break even on just the PITI with 20% down and 5.5% financing and that's not even considering Cap Ex, vacancy, management or repairs.

I calculate the expenses to be 128/month for taxes, 100 for insurance 12 % vacancy = 108.

I usually assume 20% of the gross rent roll for vacancy & repair.

Based strictly on the numbers and some of the common rules it seems like a bad deal (50% rule).Rent: $1250Management: $125Maintenance and vacancy I factored at $125 (5% for each; built in 2005 low maintenance and very low vacancy for the neighborhood)That leaves $1000 to cover the mortgage payment and insurance.

So you can see if hard times hit and you have a vacancy for 2 months, and the rent ends up being 20% lower than current/target, that you are still in the black for the year.

Tell me if I'm on the right trackUsing a gross estimate - the 50% rule...Assuming no upfront renovation is needed...Your gross monthly rent ($3300) minus 50% (taxes, insurance, upkeep, vacancy, am I forgetting anything?)

It may not cash flow but I have maintenance, property management (which I will do for 2 years), vacancy, and utilities all figured in to my expenses.

As far as money to be made, assuming my numbers don't change (market rent drops or is off) I should cash flow after all expenses (vacancy, capex, ins, etc. prop manage - even tho' I plan to manage myself, I built in PM for future) just under $400/mo, removing PM adds another $200 or so.