Ok good, I was nervous that there would be a special assessment or some such nonsense. Thank you for the reassurance!
Based on the math I've done, there should be positive cash flow. It's listed for 122k, my target price is 110k (max 115k).
Based on getting it for 110k, I need to rent it for at least 975 to do slightly better than break even (before any tax benefits), my target rent price would be 1050-1150 based on what other properties in the community are getting that are of similar size.
#s
purchase price: 110k (approximate value 148k)
down payment: 16,500 (15%, as indicated by my conversation with my lender)
Interest rate: 5.125 (lender said I would be between 5 and 5.125)
Payment: 509/mo
HOA/Maintenance: 230 (HOA ~208 based on what I pay and a little extra maintenance fund)
Insurance: 625 (again based on what I pay for my house that is almost the same)
yearly taxes: 2,100 (again based on what I pay for my house that is almost the same)
I would self manage from around the block.
First year scenarios:
Renting for 975 would net me only 112/yr (719 after tax benefits)
Renting for 1,050 would net me 1,012/yr (1,367 after tax benefits)
Renting for 1,150 would net me 2,212 (2,231 after tax benefits)
There is a strong rental market in my area as we are between two very large universities, on the free bus line for one of them, and both have very large graduate/professional schools (medical, dental and law). I would be looking to rent to either a young professional couple or some grad/professionals. There is also a large hospital, affiliated with the university, on the bus line that charges employees a small fortune for parking. Finally, there is a plan to connect us to the other university with a light rail project that is supposed to break ground soon.
Due to these factors, I feel it is reasonably certain the rental market will remain strong/improve and I can likely over time increase the rent and earn more income from the property in exchange for the work I will put in being a landlord. Though I'm sure someone will say I would do better with an index fund :-)
Any additional thoughts?