Rental Property Cashflow Calculation

are you doing management yourself? even if you are you need to put a number on it. you also have to do research on your area. find out what vacancy rate is. how old is the home? i.e. does the roof have 20 years on it? what i mean is, are repairs and upkeep costs in the near future? you need to put aside some maint./ repair reserves if you're going to keep it these are things you must consider. if your realtor is on top of his/her game, they can answer alot of needed questions. they have any knowledge, you need to soak it up.
keep moving forward, rob

Thanks Rob, yes, for now I am doing the management. And I am clear on the fact that I need to put a number on the maintenance and repair reserves. My question is not of whether or not I should put a number down, but HOW MUCH is typically recommended to set aside for the items marked with the question marks.

I am not yet working with a realtor, I have only found skeptical realtors, so no luck on that front; but for now I just want to have a clear financial picture of the property I own. How much of my personal budget should I allocate to that property (assuming it does in fact have a negative cash flow).

-G

on your Vacancy do between 5%-8%, maintenance is around 10%, this is what I generally do.

Curtis Fillers
(Charlotte,NC)

why do you have realtor listing? do you want to sell? or is this for rental listing? if so, the property manager (PM) will take care of that...

I use about 7% for PM... and my PM leases my properties with a 2yr contract, so that reduces my vacancy reserve to 1 month for every 2 years instead of 1 month per year...

for maintenance, depending on how old/condition your property is; you can set aside $30/month to $70/month...

something to consider: could you refinance the property and lower the mortgage?

wishing you success,

Guillo,

I'm assuming that is the only property you own, so you can still claim it as your 'owner occupied residence'
do you know if your property is a Freddie Mac or Fannie Mae? did you buy prior to May 2009? if so, you may be able to refinance under the HARP program-see link below

http://www.makinghomeaffordable.gov/programs/lower-rates/Pages/harp.aspx

Www.zilpy.com great site for what if's.

Thanks Valuni,

I did buy prior to May/09, but it is not Freddie Mac or Fannie Mae owned...

-G

use the tool below - it will give you the %'s and more

Awesome tool, thanks! I played with it all night yesterday.

Hi Guys -

The zilpy.com sites seems to be gone. Does anyone know of a website that tells you the average price of rent for a given area? A tool like that would be very helpful for those of us investing outside our immediate area!!!

Thanks in advance
Kristin

Try this, it's what I use.

http://www.rentometer.com

If you are looking to invest a part of your income for property management services,You can contact solano county property management and they will assist you in purchasing property.

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solano county property management

This site is awesome. Thank you so very much for suggesting it. This is going to help with all my cash flow properties.

When estimating minimal cash reserves, you should plan for worst case scenarios...

For example, I "Plan" to be financially ready for a property to be vacant @ three months out of the year (it's never taken me three months to rent a property).

Guesstimate @ 10% a year for repairs, maintenance, and keep as large a nest egg as you can for unplanned repairs/replacement.

If having a realtor list and show your property, I believe they usually take one month's rent for their services... I've only went this route once. Being in a metropolitan area, I personally do it all myself with just Craigslist. I know that isn't necessarily effective in all parts of the US.

When estimating minimal cash reserves, you should plan for worst case scenarios...

For example, I "Plan" to be financially ready for a property to be vacant @ three months out of the year (it's never taken me three months to rent a property).

Guesstimate @ 10% a year for repairs, maintenance, and keep as large a nest egg as you can for unplanned repairs/replacement.

If having a realtor list and show your property, I believe they usually take one month's rent for their services... I've only went this route once. Being in a metropolitan area, I personally do it all myself with just Craigslist. I know that isn't necessarily effective in all parts of the US.