Yippee - the property manager is on board! We'll be renting the condo for $950 a month. After our monthly HOA fees ($307) and monthly property management fees (10% - $95), we'll be collecting around $548 per month. I'm also paying my lawyer $30 per month to deal with the bank account and make any payments etc, so that brings us to $518 per month.
Yearly, that's $6216 in income. Then we take off insurance, property tax and miscellaneous maintenance.... let's say we're down to $5000 in our hands. It's not a magnificent cash flow at 7.6% but then we need to consider:
1. The likely capital gain over 5-10 years
2. The likely strengthening of the US dollar over the next 5-10 years
Word of warning: let's say we get $5000 in our hand and we've convinced ourselves it's all good, considering points 1 & 2 above. If you're up against the wall with your repayments, it's not worth the risk. See, here's a few more expenses... accounting fees in USA could be a bit of a shock and what if it goes untenanted for a few months? Suddenly, there's nothing in the hand. If you're relying on positive cash-flow with your investment property, I'd have to advise you to rethink. Positive cash flow should be a bonus, if it happens - please don't do it if you'll have to depend on it, because nothing is ever certain. Remember, that's exactly how the USA got into this mess in the first place.
As with any gamble, don't do it if you can't afford to lose it!
Hi Jane, Thanks for the blog. Great experience you have shared here ...
ReplyDeleteThanks, VinaConsulting - I just went to your page. Perhaps we could do business sometime, if you're looking for a partnership in Australia? I own a training company in Perth. www.lotuspm.com.au
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