rate of return
Remember to add a property manager into the equation which is can be different for every company if you are not going to property management yourself.
Taxes and insurance will be higher. This below is not a normal rate of
return!!! Look for 8-10%. As the prices climb the lower the
rate of return.
On a larger unit like a 10 unit you will need
commercial insurance property agent.
NUMBERS BREAKDOWN PER UNIT (one unit)
-Monthly Rental Rate-$750
-Annual Rental Rate-$9,000
Expenses
-Vacancy-5%-$450
-Maintenance-5% $450
-Taxes $504
-Insurance-$500
Total Expenses
$1904
Net Operating Income (Annual rate minus Total
Expenses)=$7,096
Purchase
Price-$35,000
ROI (interest on your money) 20%=NOI $7,096 divided by purchase price $35,000
Years to recoup your $35,000-$35,000 divided $7,096=4 years
Plus don't forget to add the property management fee. Every company is different.
Taxes and insurance will be higher. This below is not a normal rate of
return!!! Look for 8-10%. As the prices climb the lower the
rate of return.
On a larger unit like a 10 unit you will need
commercial insurance property agent.
NUMBERS BREAKDOWN PER UNIT (one unit)
-Monthly Rental Rate-$750
-Annual Rental Rate-$9,000
Expenses
-Vacancy-5%-$450
-Maintenance-5% $450
-Taxes $504
-Insurance-$500
Total Expenses
$1904
Net Operating Income (Annual rate minus Total
Expenses)=$7,096
Purchase
Price-$35,000
ROI (interest on your money) 20%=NOI $7,096 divided by purchase price $35,000
Years to recoup your $35,000-$35,000 divided $7,096=4 years
Plus don't forget to add the property management fee. Every company is different.
