MIght Be A Dumb Question....CASH FLOW
I am looking into REI, and wondered what would be a good percentage above a mortgage to make posititve cash flow on a rental? I understand you have to pay for expenses that may occur, but what does everyone look for to make it a good cash flow house? Thanks.
v.r
Mike
Rental properties are easy to make cash flow as long as the property is set up in a good condition to where it won't cost you more money to operate. In order to make more then just the monthly rent you can before intial move in charge an admin fee for paper on move in, choose partical of the security deposit as a fee. When choosing to have fees that is what gains your additonal profit. You just have to remember to put your fees in your rental agreement or your rental rules and regulations. Always, Always, Always do a pre-move in/move out inspection!
Renters can make yeah or break yeah!
[addsig]
Many times, just one property won't make or break you. After taxes, mortgage, and insurance is paid, you usually have about 200-400 a month positive cash flow. (400 if you got the house for a steal) What a lot of people do, is get a property with equity, and then use the equity for a down payments on a second rental, and keep using equity.
[addsig]
Great info...that is what I was looking for. Is there something on the web or a book showing how much a good cash flow house would be? So, a safe 400 dollars above the mortgage?
You cannot apply a simple formula of mortgage + $400.00 to get cash flow. Your market will dictate as will the amount of down payment. 100% financing deals will cash-flow if you can get a property under market value.
Why dont you use this sites resources?? Throw in your numbers and see what type of cash flow you can get...... Its called the ProForma-nator Under My Tools.....
Everyone makes it seem so easy to make money on rentals, but where I live, I'd be lucky to find a condo or townhouse for $200K. Compute that over 30 years at an average interest rate and there's no way to make a profit when market rate rents are only $1600-$1800 per month.
I have a question. What type of admin fees are you referring to? Do you mean like the preparation of the lease agreement, credit checks, etc.?