[quote=Mohammad]Let’s say I bought a condo for 250 k cash ,
what other expense, fees,etc.. I have to pay ?
and after that what’s my monthly, yearly obligation?
I need to calculate the return on investment[/quote]
Oh boy….If you have to ask, then you need to do more homework before you become a landlord imho.
Just a few things to consider.
1. Property tax
2. Mello Ruse (if applicable)
3. HOA
4. Landlord Insurance + Umbrella insurance if you have meaningful assets and don’t want deal with frivolous lawsuits
5. Property Manager fees (if you aren’t going to deal with it yourself)… 6-8% of rent though I see some PM’s charging a $100/month flat rate.
6. Expect a cash reserve for unexpected repairs.
7. Assume a 90% occupancy duration, because if you lease in 6months terms, assume 1-2 months of vacancy.
8. Don’t forget about your tax consequences.
…
*Factor in the depreciation as a schedule E deduction
*Since you’re paying cash, if you are still positive, factor in you’ll be taxed as earned income rate
*If you’re negative, and your AGI is > $150k, to damn bad. You can’t report a loss, but just carry it over to the next year.
*If you take out a loan, then depending on what type of loan, and whether the loan is off of your primary or directly off of your rental, you either report that as a cost on Schedule E or as part of Schedule A on your primary. Schedule A Mortgage Interest Deduction is not phased out for your purpose, so you can pretty much fully deduct. Schedule E, again, you can’t report a loss if your AGI >$150k
