Investment Condos for sale in Oxford, MS

If an investor purchases a condo for sale in Oxford, MS that is furnished, it can be used for gameday and other weekend event rental!

All about investment condos

Are you looking at investment condos for sale in Oxford, MS to create passive rental income? Your decision will ultimately hinge on the potential profit and net yield that the investment can make.

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Tools to make it easy searching for a condo for sale in Oxford, MS

Download this link for a spreadsheet to help make this calculation easy. Respectively, each of the cells in bold have the financial formulas in the cell to complete the calculation. By understanding these calculations, your investment can better produce the desired rate of return.

Monthly mortgage payment

In the first column, the calculation of the monthly mortgage payment is shown. First, input the purchase price of the condo and down payment into the cells. After checking with a lender for loan interest rates and terms, you can input the interest rate and term length. Also, the investor will need to denote the term length of the loan in total payments instead of years (i.e. 30 years x 12 payments/year = 360 payments, for example). If you do not know the current interest rates, you can shop loan rates at bankrate.com. The monthly mortgage payment is calculated below in the bold cell.

Operational expenses

Condos have a lot of reoccurring annual operational expenses to consider in your investment analysis. In the second column, you can calculate the annual operational expenses. In a previous post titled Investment Property: Purchase Price and Cash Flow, the reoccurring expenses of a condo investment are discussed in greater detail. Click here for this article.

The annual mortgage cell is automatically computed from the monthly mortgage payment cell. First, input the annual real estate taxes and insurance. In addition, be sure to check with the Lafayette County Tax Assessor for homestead tax exempt status. For example, some investment condos will only need interior insurance if an HOA exists and covers external insurance. You will also need to budget for maintenance and repairs, HOA (if it exists), vacancy loss, and legal fees. While the investor will calculate vacancy loss as one-month of the projected rent, you can increase this vacancy loss if you desire. Finally, the spreadsheet has a legal fee estimate, which is an arbitrary amount. For an eviction, the investor will need to find an attorney to file the paperwork on behalf of the landlord.

Net yield: The only metric to ever purchase an investment condo for sale in Oxford, MS

In column 3, the investor will calculate the potential profit value and net yield for the property. The tenant’s total rent receivable is an annual amount. As a result, a landlord can generate this amount from renters or vacationers. The landlord can subtract the annual operational expenses from this amount to produce the annual profit value. Lastly, the investor can generate the annual net yield from the profit and initial cost of investment values.

Furthermore, an investor may choose to speculate the net yield over time. Moreover, if you add an inflation rate to the operational expenses, you can follow your investment over years. In addition, remember to increase the total rent receivable since you will be charging more in rent due the increased expenses.

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