[Maranda]

There are calculators for this- bigger pockets has a good one. You also have to factor in capex, vacancies, etc. in addition to other major costs.

[Stan]

When you consider expenses, plan for unexpected capital improvements. I assume 1% of value on top of typical maintenance and repairs.

[Miles]

What is the asking price?
The simple analysis is:
Add up all expenses including mortgage.

Include long term reserves and repairs and add an amount for vacancy.

Subtract that from gross revenue. How much $$ does it put in your pocket? Forget about appreciation.

If you buy hoping for appreciation, you’re speculating.

If you buy because it will cash flow, you’re an investor.

Which one do you want to be?

[Kaylee]

This is not intended to be a definitive answer but, very quick rule of thumb for analysis to qualify a good investment is to have gross rents = 1% of purchase price.

So, if this duplex is selling for $560,000 or less it likely will work out as decent investment. Makes sense?

[Author]

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