anchor.direct
Property investor
The house appears sound and I have allowed for ordinary upkeep, vacancy, management and tenant changes. What remains unclear is whether the local expenses make the investment unworkable before financing is even considered.
It is a 5-bed detached home in Phoenix at $985,000, with projected rent of $3,349 a month. The tempting figure is the roughly 4.1% gross yield, but there is not much room for insurance, property tax or an expensive house repair. Borrowing costs would narrow it further.
Which Phoenix expense tends to upset an otherwise conservative cash-flow estimate on a property like this? I’d also be interested in the minimum net return others would want before accepting the maintenance and financing risk.
It is a 5-bed detached home in Phoenix at $985,000, with projected rent of $3,349 a month. The tempting figure is the roughly 4.1% gross yield, but there is not much room for insurance, property tax or an expensive house repair. Borrowing costs would narrow it further.
Which Phoenix expense tends to upset an otherwise conservative cash-flow estimate on a property like this? I’d also be interested in the minimum net return others would want before accepting the maintenance and financing risk.