stress test....
TT brought up a good point, can a professional landlord survive on a 30% vacancy rate?
on back of my mind, I usually think we can survive on 75%, if any lower, I have to be hand on again...
so look back last 18 month, here my break down.
Hard cost:
Interest 33%
fixed mortgage principle paydown 4%
Tax 12%
Insurance 4%
Supplies & Materials 4%
Utilities & others 7%
total fixed cost 64%
Soft cost:
Private interest only note principle paydown 4%
labor cost 5%
total soft cost 9%
total: 73%
our avg collection rate last 5 years about 95%
so if we collect less than 70%, I have to work 100 hours a week to survive.
TT brought up a good point, can a professional landlord survive on a 30% vacancy rate?
on back of my mind, I usually think we can survive on 75%, if any lower, I have to be hand on again...
so look back last 18 month, here my break down.
Hard cost:
Interest 33%
fixed mortgage principle paydown 4%
Tax 12%
Insurance 4%
Supplies & Materials 4%
Utilities & others 7%
total fixed cost 64%
Soft cost:
Private interest only note principle paydown 4%
labor cost 5%
total soft cost 9%
total: 73%
our avg collection rate last 5 years about 95%
so if we collect less than 70%, I have to work 100 hours a week to survive.
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