Quote:
Originally Posted by Fly Bear
Looks like I would get a 15% COCR on the 90k investment. For that one, the fee covers these:
* Common Area Maintenance
* Exterior (Landscaping)
* Limited Insurance
* Trash Pickup
* Water
Where are you getting the 15% COCR from?
COCR = (NOI - Mortgage payment)/Cash paid
NOI = gross rent x .55
NOI = (1400 x 12) x .55 = $9,240
Mortgage payment on $87,500 (125k - 37.5k) = 567.52/ mo x 12 = $6810.24
$9,240 - 6810.24 = $2429.76
Cash paid = $37,500
$2429.76/$37,500 = 6.5% COCR, it will take 15 years to make the down payment back.
EDIT: the .55 is the average income after expenses for a SFH. See post #101 in this thread for calculations.
Also I assumed 6.75% mortgage fixed at 30 years.