Looking to buy my first house by the end of the summer to be used strictly as an investment rental income property, general real estate holding.
5 bedrooms, and if I can re-develop the basement to add in 2-3 rooms to bring the total room count to 7 rooms, that would be preferable.
Say for example I buy the house for $300,000.
The monthly price break down would be as follows:
Mortgage : $1500
Utilities : $200
- Internet/cable : $100 for the house
- Fixing Things around house/upkeep/emergencies : $150
- Property Taxes : $150
- What else am I missing here : $???
Total - $2100/month
I believe the laws in my city would not allow for a personal kitchen in every room. But they would allow for a kitchen in the basement. I could just advertise the kitchen as the common place to be shared betwixt renters, same as bathrooms. But this is somewhat expected when the rent is so cheap.
Say there are 7 rooms all occupied and each renter is paying $450 per month for rent.
That makes my rental income from units - $3150 per month.
Subtracting my operational expenses, I am left with $1050 per month. I am positive I would be able to find renters, cheap rent attracts certain crowds in my city (be they students, poor people, people with criminal history, etc). But I want to make it clear to my renters that if I don't have my rent money/cheques bounce by the first of the month that I will kick them out of my house for trespassing.
Any other tips to keep in mind from the financials aspect of the process?