LightPaper
Developer
Getting this wrong would leave me with an expensive Boston house that looks profitable on rent but produces very little usable cash. The property is a 4-bed detached home priced at $855,000, with projected rent of $4,949 a month. That is about 6.9% gross.
I have allowed for empty periods, management, repairs and turnover, but Boston property tax is the number I am least confident about. Insurance and energy performance could also alter the result, and I do not want financing assumptions to disguise a weak operating return.
What property-tax figure would local landlords test at this price, and how much would you hold back each year for maintenance? Once those costs are included, what level of net cash flow would make the deal worth investigating further?
I have allowed for empty periods, management, repairs and turnover, but Boston property tax is the number I am least confident about. Insurance and energy performance could also alter the result, and I do not want financing assumptions to disguise a weak operating return.
What property-tax figure would local landlords test at this price, and how much would you hold back each year for maintenance? Once those costs are included, what level of net cash flow would make the deal worth investigating further?