Author Topic: Evaluating this triplex rental  (Read 1408 times)

jnc

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Evaluating this triplex rental
« on: February 17, 2016, 05:47:46 AM »
Purchase price: $199,500
Rent revenue: $2,150/mo
Taxes: $2,355/year
Insurance; $1,300/year
Property management: $1,500/year

Owner pays water, garbage and grounds which is $175/mo or $2,100 per year.

I've only owned SFH properties and my understanding that multifamily homes have higher expenses. This one beats the 1% rule but not by much and certainly by less than my other SFH properties, so I think i'll give it a miss but was just wondering what others thoughts.

NoNonsenseLandlord

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Re: Evaluating this triplex rental
« Reply #1 on: February 17, 2016, 06:40:05 AM »
Option 1
Rents 25,800
Expenses (50%) 12,900
Remaining 12,900

How much are you putting down, and how much is your mortgage?

Option 2
Rents 25,800
Taxes -2,355
Insurance -1,300
Prop Management -1500
Utilities 2,100
Remaining 18,545

Property management seems light.  Assume 10% of rents.  What about vacancy costs?  What about maintenance? Assume 10% of rents.  An old building may be 20% for a few years.  Any common area heating or lighting?  HOA dues?


arebelspy

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Re: Evaluating this triplex rental
« Reply #2 on: February 18, 2016, 03:40:51 AM »
Purchase price: $199,500
Rent revenue: $2,150/mo
Taxes: $2,355/year
Insurance; $1,300/year
Property management: $1,500/year

Owner pays water, garbage and grounds which is $175/mo or $2,100 per year.

I've only owned SFH properties and my understanding that multifamily homes have higher expenses. This one beats the 1% rule but not by much and certainly by less than my other SFH properties, so I think i'll give it a miss but was just wondering what others thoughts.

Higher vacancy and turnover costs, especially, with MF over SF.  Landscaping will likely add some too, depending on your location (snow removal or lawn cutting or whatever).  Where'd you get your mgmt number?

If it's less return than your other SFRs, it seems worse in every way, IMO.  What's making you consider it?
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