I've never bought a property before but my wife and I have been throwing around the idea of buying a condo. We live in a great neighborhood, biking distances to both of our works. We found a couple condos for sale about a 1/4 mile up the road and I wanted some advice on if they are decent deals as this forum is basically my only knowledge source so far for being a landlord.
$50,000 (would probably have to buy with cash)
$345 HOA includes insurance, major (i.e. roof) repairs, and all utilities
Could rent out for $900/month
This sounds like a decent deal, but am I doing the math right? Being conservative:
$900-$350 = $550 revenue.
$550/2 to cover repairs and vacancies = $275/month return (note this ignores what the HOA would cover but we're being conservative)
$275 * 12 = $3300/year
$3300/$50000 = 6.6% return on investment
If I say the HOA covers 50% of all repairs I'll have to make (heater, A/C, Roof) then the return goes up to 9.9%
What am I missing? Does this sound worthwhile?
----
Also, if I currently live in an apartment where I pay $950 including utilities would I be better off moving into the new place or staying where I'm at and being a landlord at the same time? I don't know how to do the math on that one.