Rental Examples

Note: All calculations are in U.S. dollars. All examples assume that the lot is purchased with cash, and that the buyer has put US $0 down on construction of the home. Duplex examples assume that a 2-floor structure is allowed on the lot.

DUPLEX
3 examples, in order of size

Example 1: Duplex on 1 Floor

1)  Duplex: 2,558 sq. ft. (1,279 sq. ft each floor) X 60 sq. ft. = 153,480

2)  153,840 financed over 20 years at 9 % interest rate = 1,368 monthly     payment

3)  Taxes: ½% on ( 223,380 – 150,000 = 73,380) = 366.90 per year or 30.58 per month

4)  Insurance: 1% per year = 1,534.80 per year or 127.90 per month

5)  Utilities and water: 2,400 per year or 200 per month

6)  Rental income = 44,000 per year or average of 3,667 per month

7)  Maintenance fees: 300 per year or  25 per month

8)  Property management fee (20%):  8,800 per year or 733.40 per month

9)  Expenses = 1,368 + 30.58 + 127.90 + 200 + 25 + 733.40 = 2,484.88

10) PROFIT 3,667 – 2,484.88 = 1,182.12 per month

Example 2: Duplex on 2 Floors

1)  Duplex: 3,374 (1,687 sq. ft each) sq.f t X 60 sq ft. = 202,440

2)  202,440  financed over 20 years at 9 % interest rate =  1,800 monthly payment

3)  Taxes: ½% on (272,340 – 150,000 = 122,340) = 611.70 per year or 50.98 per month

4)  Insurance: 1% per year = 2,024.40 or 168.70

5)  Utilities and water: 2,400 per year or 200 per month

6)  Rental income = 44,000 per year or average of 3,667 per month

7)  Maintenance fees: 300 per year or 25 per month

8)  Property management fee (20%): 8,800 per year or 733.40 per month

9)  Expenses = 1,800 + 50.98 + 168.70 + 200 + 25 + 733.40 = 2,978.08

10) PROFIT: 3,667 – 2,978.08 = 688.92 per month

 
Example 3: Duplex on 1 Floor

1)  Duplex: 3,754 (1,877 sq.ft each) X 60 sq.ft = 225,240

2)  225,240 financed over 20 years at 9% interest rate = 2,002.82 monthly payment

3)  Taxes: ½% on (295,140 – 150,000 = 145,140) = 725.70 per year or 60.48 per month

4)  Insurances: 1% per year = 2,252.40 per year or 187.70 per month

5)  Utilities and water: 2,400 per year or 200 per month

6)  Rental income = 44,000 per year or average of 3,667 per month

7)  Maintenance fees: 300 per year or  25 per month

8)  Property management fee (20%): 8,800 per year or 734 per month

      9)  Expenses = 2,002.82 + 60.48 + 187.70 + 200 + 25 + 733.40 = 3,209.40

      10) PROFIT 3,667 – 3,209.40 = 457.60 per month

1-FLOOR HOMES
3 examples in order of size 

Example 1

1)  Home: 1,450 sq. ft X 60 sq ft. = 87,000   

2)  87,000 financed over 20 years at 9% interest rate = 773.60 monthly payment

3)  Taxes: ½% : none, there are taxes under 150,000

4)  Insurances: 1% per year = 877 per year or  73.08 per month

5)  Utilities and water: 2,400 per year or 200 per month

6)  Rental income = 22,000 per year or average of  per month 1,833.33

7)  Maintenance fees: 300 per year or  25 per month

8)  Property management fee (20%):  4,400 per year or 366.67 per month

9)  Expenses = 773.60 + 73.08 + 200 + 25 + 366.67 = 1,438.35

10) PROFIT 1,833.33 – 1,438.35 = 394.98 per month

 
Example 2

1)  Home: 1,991 X 60 sq.ft = 119,460

2)  119,460 financed over 20 years at 9% interest rate = 1,062.23 monthly payment

3)  Taxes: ½% on (199,360 – 150,000 = 49,360) = 246.80 per year or 20.57 per month

4)  Insurances: 1% per year = 1,194.60 per year or 99.55 per month

5)  Utilities and water: 2,400 per year or 200 per month

6)  Rental income: 22,000 per year or average of 1,833.33 per month

7)  Maintenance fees: 300 per year or  25 per month

8)  Property management fee (20%):  4,400 per year or 366.67 per month

9)  Expenses = 1,062.23 + 20.57 + 99.55 + 200 + 25 + 366.67 =  1,774.02

10) PROFIT 1,833.33 – 1,774.02 = 59.31 per month

 
Example 3

1)  Home: 3,020 X 60 sq.ft. = 181,200

2)  181,200 financed over 20 years at 9% interest rate = 1,611.22

3)  Taxes: ½% on (261,100 – 150,000 = 111,100) = 555.50 per year or 46.29 per month

4)  Insurances: 1% per year = 1,812 per year or 151 per month

5)  Utilities and water: 2,400 per year or 200 per month

6)  Rental income at: 22,000 per year or average of 1,833.33 per month

7)  Maintenance fees: 300 per year or  25 per month

8)  Property management fee (20%):  4,400 per year or 366.67 per month

9)  Expenses = 1,611.22 + 46.29 + 151 + 200 + 300 + 366.67 = 2,675.18

10) PROFIT 1833.33 – 2,675.18 = 841.85 per month