Short Term Investment Property Analysis

The following property analysis shows an example of what you can expect to earn in one year from a 3 bedroom, 2 bath furnished vacation home, assuming a sales price of $150,000 with 30% down. This presentation is offered only as a guide and is not a guarantee, as situations will vary.

Rental income		$21,450
Expenses
Property Taxes	$2,400
Insurance	$800
Lawn care/Pest Control	$2,100
Misc. Utilities	$3,000
Management Fees	$1,200
Repairs & Maintenance	$1,300
Cleaning Service	$1,600
Licensing & other Misc.	$500
Total Expenses		($12,900)
Net Profit before Mortgage Payment		$8,550

* Mortgage payment based on interest rate of 7% = $8,383
* Net cash flow after Mortgage = $167 (Considered Break Even)

Please note that approximately $1,000 of the mortgage payments for the year would be applied to the principle, which adds to your actual profit. In addition, by conservative estimates your property should appreciate in value by 5% per year.

Of course, with a vacation rental of this type, your return on investment is mostly coming from the increase in value of your property, as well as the increase in equity over time as more of your mortgage payment is applied to principle instead of interest.

No one can really expect to make a large annual net income from renting out vacation property, but for the person who wishes to spend a few weeks per year in the property this can be a great benefit.