Hello fellow investors ,
I'm kind of new to investing .Only experience I have is through Don"s books and advice through some REIN members.
I have shortlisted a potential property in a great neighborhood . I have evaluated it from the limited understanding I have ,but looking for insight if it is a good decision or not.Here are the numbers provided by the agent from last year .
DUPLEX
LIST PRICE -419,000
TAXES : 3098
RENTAL INCOME: 29400
ADDITIONAL INCOME (solar panels) : 5160
INSURANCE : 2500
REPAIRS : 1036
TOTAL OP EXPENSES : 12824
Other details: Walking distance to transit and plaza with national brand grocery store.Age of property -23 years
Im looking for suggestions on these numbers if they make sense or not according to the system or your experiences.If not what am I missing and how to evaluate it. Thanks
Pooja

You need to verify reasonableness of these numbers, specifically purchase price and rent.

Missing / too low in your expenses is R&M ( repair and maintenance ) and property management. PM is 10-12% of rent and R&M is anywhere from 0 to $10,000, perhaps use $2000/year as a guideline.

Can you qualify for a mortgage with 20-25% down ? Do you have the $90,000-100,000 required ?

Using these realistic figures with 20% cash down and a 2.4% mortgage what does the cash flow look like ?

Is this a city with upside ?

Do you intend to self manage ? If so, do you have the knowledge required ? If not, did you talk to a PM firm yet ?

Thank you Thomas for average percentages on PM.We are looking at managing our self as it falls closer to where we live .
In terms of mortgage and down payment yes we already talked with our banker. Thats not a concern .
Property located in KW AREA and location prospect is good but to me the rental numbers dint look right .
Spoke to realtor and he advised the purchase price is a little over but not much according to area.Condition wise the property needs renos as everything is too old.
Additional income from solar panels is still a question mark as I have no idea how that works.

Talk to a few PMs and check out rentals in general to see what is realistic. Most realtors are clueless. They want to sell you a house for a commission. Some lie and many are merely clueless. Do your own DD, even if you are using a more investor friendly realtor ( there are a few but not many).

In these numbers, there is no allocation for utilities or for lawn/snow. I would doubt that water and gas would be included. KW has hard water. Typically there is a water heater that is rented.

Attached is a property I sold a couple of months ago. I did the analysis with Landlord Cash Flow Analyzer Pro (Canadian version). I would suggest you pull it down. Its around $100. You will notice in my analysis that I had an allocation for both property management and vacancy. For property management, if you are self-managing, that it the cost of your time. Its a very conservative analysis and I use it to determine list price on properties that I list. If its not cash flow positive, I am unable to sell the property on its investment merits.

For rentals in the area, check out WalkScore.com.

I would also suggest finding a REALTOR that specializes in KW income properties to help you in your search. I would be reluctant to use the listing agent that may not be familiar with income properties.

Mike