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Posts: 2
Reply with quote  #1 

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?


Posts: 178
Reply with quote  #2 
Did you count vacancy?  Repairs and maintenance?  management fees?

Even if you manage it yourself, you need to account for all of the fees.


Landlording for maximum profitability and Financial Independence


Posts: 28
Reply with quote  #3 
You cannot make a hypothetical calculation unless you find a renter. You don't know yet how much the renter will be willing to pay. 
Kingsbury Homes
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