“I saw a house that rents for $1700/month. With 20% down, my mortgage payment should only be $1027/month. What other expenses would I have to pay?”
Answer:
Great question.
Many people make the mistake of only comparing their rent to their mortgage payment and thinking the rest is positive cashflow. They’re pretty excited, until they have to start paying the other bills.
Here are other items that may decrease that cashflow:
– Taxes
– Insurance
– HOA fee —————— (if there’s an HOA)
– Mello Roos ————— (if applicable)
– Vacancy
– Management ———— (-0- if you manage yourself)
– Cleaning —————– (lower or -0- labor cost if you do)
– Repairs/Maintenance –(lower or -0- labor cost if you do)
– Gardening ————— (lower or -0- labor cost if you do)
– Advertising
– Utilities
– Misc
Even with those expenses, that house sounds like a great investment.
I’m a firm believer in rental real estate. Of course, you’d expect me to say that, given that I’m a real estate broker.
But more fortunes have been made in real estate than any other investment. And I put my money where my mouth is: I own apartments out of state, just bought a rental condo in Spring Valley, and am on the hunt for another investment property.
Good luck with buying that rental.
(REMINDER: Although I don’t tell everyone who emails me to dump their agent and use my team and me, please remember we do help people buy and sell real estate all over San Diego County. In fact, in addition to remembering, please CALL US the next time you want to buy or sell a home or investment property. Thank you…)
Trade Up Your Investment Or Rental Real Estate & Pay ZERO Taxes
