I have no idea what a place like this goes for, but usually the nicest unit in the place doesnt get big cuts first.
Also with the math, ren beat me to it. I remember reading a post on here that industry standard is ~30% rent to maintaince and vacanacy and other associated costs that rentals incure.
If you want to assume high rents in less desirable areas, you also have to assume higher turn-over and higher maintaince. Have the place empty for a month and their goes your profit for the year. No matter what you are not gonna get someone out on March 31st and someone else in April 1st, so it is gonna hurt those margines.
Add in changeing the carpet every 4-5 years, painting every 2-3, new appliances every few years as tennants are not nice to things they dont own. Oh dont forget the maintance during tenenancy that you will get hit for too. I dont know how many times my father got calls at 11:30 at night cause the drains were backedup or the hotwater wasnt working or the toilet was running…… or you name it. (Who knows, maybe a mouse will try to move in and then youll have to hire professional SWAT teams to go get it so your tennants can sleep at night 😉 ) Youd be suprised what 1 AM plummer calls are gonna do to your “profits”. And yes, you can do alot of it yourself, but you need to factor in your time. Do you really want to get up at all hours of the night or give up a week of vacation a year to fix up and rent your place for a few hundred dollars?
If you want to actually make money on your rental in a yearly basis instead of a monthly basis, take your 1600/month cost and mutiply by 1.3. It is about 2100/month. Good luck getting that for a 2/2 convert in LI, I think esmith just said he rented a SFR in PQ with a yard and all for that.
Look. I am not against people getting rentals, infact I am all for it. But the math being done here is equal to saying that a cars costs are equal to its monthly payments, insurance and gas. That is cheaper than the bus, so it is cheaper to buy the car. Never mind the new tires, car washes, wax, oil changes, tune ups, and windshield replacements.
