July 22, 2013

Officially Landlords and Re-evaluating our Investment

We signed the lease today with our first tenants for our rental property.  I am so excited to be at this point.  They gave me a check for $1525 which covers the deposit and August's rent.  I told them I couldn't give them the keys until the check cleared but feel comfortable that there won't be any problems.  The woman gave me a copy of the bank statement to show they have the money.  Her husband and son want to be able to move some stuff into the garage tomorrow since he has the day off so I did let them have the garage door opener.

Here is a new evaluation on our rental property.  I am using the same calculator as before from here:

Purchase Price:$68000
Loan Amount:$54400
Interest Rate: 4%
Property Taxes: $627
Property Insurance: $262
Vacancy Rate: 8% or 1 month per year
Rent: $825 per month
Condo Fees: $110 per month
Extra Maintenance Expenses: $600 Annually
Misc Expense: $50 (background checks)
Appreciation: 2%

ROI with appreciation: 36.05%
Cap Rate: 8.44 (From what I understand through research, this indirectly measures how long it will take for the property to pay for itself. In this case, 11.85 years.)

ROI without appreciation: 26.05%
Cash on Cash: 19.26%

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