No. of Recommendations: 1
Hi Phmerc,

Initially, before I got to the bottom, I was going to encourage you not to become an absentee landlord (especially for a single unit.)

NOw.... you say you have the ability to finance it 100% @ 2.69%!?! OK, I definitely want to know how you are going to swing that....

But let's run the numbers assuming its true;
$237.61/month = $106,000, I/O credit line @ 2.69%
$40/month = $480 insurance
$79.16/mo = Taxes
$100/mo = maintenance
$396.33 hard costs of carry

$100/mo = property management
$166.66/mo = 2 months annual vacancy cost contingency, spread over 12 months
$83.33/mo = typical 1-month's worth of rent fee for unit turnover & marketing
$647.32 all-in costs of overhead...
- $1,000 Gross monthly rent revenues
$352.68 monthly pre-tax margin

THE NUMBERS look good...
*HOWEVER* there is still a LOT MORE to it than just the numbers.

I'm still not a fan of long-distance long-term landlording (the exception being vacation rentals.) There are so many nuanced things that can start small and quickly, silently, secretly eat away your equity & cashflow when disinterested 3rd party management is being used (and you don't personally have a property management experience background from which to manage the managers.)

*EVERY* market has local opportunities... would you be willing to begin your landlording career by doing the hard work of hunting out the desperado sellers in your own neighborhood to do this from?

Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.