I was planning to buy a condo in River North area in Chicago to live. However, I can rent it out and make pretty decent cash flow so I'm thinking about renting it out and rent another smaller condo to live. Here is the number:
Purchase price $320k with 20% down.
Monthly payment after everything (taxes, HOA,...) $2125
I can rent it out for about $2600 (based on historical rental data in the same building).
That is $475 cash flow a month or $5700 a year.
My closing cost is $71k
so I calculated my ROI at $5700/$71k * 100 = 8%.
That is a decent ROI not including someone else is paying for the equity of my condo.
Did I miss anything in my calculation? I didn't factor in vacancy or maintenance because that area of Chicago is very easy to rent out and not much to maintain for a condo in relatively new building.
What do you guys think?