Rental Pro Forma?
Does anyone have a good break down of "rule of thumb" expected costs and expected ROI they would like to share.
For instance, I'm looking for hints on what a SF investor should expect for ROI and things like typical holdbacks for repairs, taxes, insurance, advertising, etc. in order to quickly generate an estimate of positive cashflow for rentals.
Suggestions? Thank you.
Your expenses should not be over 30% of your gross income. But as far as a rule of thumb, your costs vary too widely in different areas for me to give you a set amount for each line item. My personal hold back is 30% of the annual gross income, I keep in reserves for repairs. I usually end up spending between 20-25%, but I keep the extra just in case. I have been told that I am high, but I spend a lot on maintenance items, like insect control, lawn care etc. A lot of that can be put on the tenant.
Good Luck,
Kyle
I usually hold back 20% for repairs, and have never needed more than that. For advertising it's difficult to have a rule of thumb as it depends on your local market, rent levels, property condition, etc. As for insurance, I'd also be interested in hearing if anyone has a rule of thimb for caclulating insurance costs before they have an actual quote.
Good luck
Does the 30% you indicated also include the mortgage, etc. ? Thanks
I don't know about Kyle, but in my case, the 20% I holdback does not include mortgage servicing.
Good luck