Folks,
I’m looking at getting into some rentals. What can you tell me about cash flow analysis? Are there templates out there? Programs? Maybe some simple things that I can use to determine what I should offer?
Nate-WI
Well figure out what your PITI will be…Figure out the maintance fees (ask current landlord), add about 10% for vacancies and 5% for advertising…if your gonna have a mgmt company incharge, thats another 5-10% of the gross rent…
basically think of all the bills you will have to pay…If they equal more than Xdollar amount about the rental income then its a good deal…
Now I say “X” because everyone looks to cashflow a different amount of money per unit (a SFH is 1 unit, a duplex is 2 units)…Most investors look for $100-$150 per unit… I tend to look for about $200-250 depending on the monthly obligation since at $100 in my market many times will kill a whole yrs profit if i have 1 month w/o a tennant…
I usually try to net at $200- $250 a month positive cash flow.
consider rent minus PITI ,maintenance, 10% vacancy
Whatever you do never buy a alligator (property that does not cashflow)
Adrian
You might want to take a look at Real Estate Investment Analysis software from www.realdata.com.
Feel free to contact me if you want more input. I have no affiliation with the company.
MG