Dear All,
I’m trying to get some tools together to help assess property investments techniques.
My initial cashflow (COCR) is based on Steve’s book “0 to 130 properties in 3.5 years.”
I was wondering is someone could give me some guidance on the level of costs I should be putting in for the following type of expenses on a P.A basis.
Management Costs
Rates
Insurance
Repairs BudgetAlso if anyone has a excel template, for property evaluation, I would be willing to swap, not that mine is that good.
Kind Regards
Brendonbrendon wilson
Hi Brendon
those costs you mentioned can vary greatly from property to property. Each investment needs to be worked out by itself.
If anyone give you a figure for each of those expenses then it will lead to a faulty assessment of the investments performance.
Facture that effect the figures are
Management costs can run from 7% up to 10% depending on location
Rates- varies too much depending on value of property and location.
Insurnece will also vary as the location and insured value.
Budget repairs- depends on the size of the home, age of the home condition it is currently in.Sorry i can’t give more clarification. You need to find out each of those costs for each investment you look at. The more you do the more you will be able to make an educted guess on the figures.
regards westan
Properties in the USA 15-25% returns- email to join our database [email protected]
Hi Brendon,
I belive that in Steve’s book he calculates a figure of roughly 5% for closing cost. This does include payback for the Rates and Taxes.Regarding insurance – we found that security affects thsi very much! A word of warning on insurances, DON’T insure the house for what you’ve bought it (ie: Buy $150K, insurance for $150K)! My friends learned this the hard way – their home burned down so the insurance has to cover removal of the rubble AND the rebuild of the home! So we factor in $70K for rubble removal and check infrequently what the replacement costs are for each of the IPs and our PPOR and add that to the insurance! Beats nasty surprises should the mudd hit the fan!
Repairs, again I belive that Steve quotes something like 2 – 5% pa. Depends on the house condition and its age.
Let us know how you go.
BTW, Westan – welcome back!
Cheers
C@34Our greatest weakness lies in giving up. The most certain way to succeed is to always try something one more time.
– Thomas EdisonI only opened this post to apply for the modelling job?
however..
Have a look at Jaffasofts site at the bottom of my post, it should help somewhat also when working out costs..
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow Calculator
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