Hello all, I am trying to have a better understanding of what my annual profit will be once my rental property is paid off. I will provide real numbers. Please tell me if I am correct in what I can expect in profits after the property is paid off. Thank you, I appreciate it.
These are the numbers IF THE PROPERTY WERE TO BE PAID OFF.
Annual taxes: $4400
Annual Insurance: $998
Annual Inspection: $150
4400+998+150= $5548
5548 divided by 12= $462 owed each month (Tax+Ins+Inspec).
Rent = $1250 monthly
$1250-$462= $788
Okay so here is where I get confused. From what I understand, after the property mortgage is paid off, uncle Sam takes approximately 25% of profits. So with that being said, 75% of $788 = $591
So is it accurate to say that $591 per month will be my profit? I am not happy with this considering I read that you should subtract $200 from monthly profits for repairs/vacancy. With that being said, will my monthly profit really equal $391 ($591-$200)?
In my opinion, $391 is not a good profit for a paid off property. Can anyone with experience with paid off properties please elaborate on this? Thanks, again I really appreciate it!