Phoenix 2-bed at $220k and $942 rent: what am I missing?

[anika_vale]

The rent leaves very little room for an incorrect expense assumption. The property is a Phoenix 2-bed priced at $220,000, advertised as a “coastal home,” with projected rent of $942 a month and a headline gross yield of roughly 5.1%.

I have spent 73 days checking the numbers and have allowed for empty periods, management, normal upkeep and a major repair contingency. Tenant turnover still makes the result look fragile; one vacant month plus make-ready work could absorb much of the margin. Which property-specific figure should I verify first—insurance, tax, community charges or something else—and what risk would you require the net return to cover? I also need to clarify what the coastal description actually means in Phoenix.

 

[lina_repairs]

Insurance and property tax need actual property-specific figures before the 5.1% means much. At $942 rent, annual gross income is only $11,304, so ordinary expenses can reduce the yield quickly. Is this a cash purchase, or are you financing it? Interest and loan terms could turn a modest positive result into negative cash flow.

 

[meter.bright]

I’d worry less about choosing a target yield yet and more about validating the description and rent. Phoenix and “coastal home” do not naturally match, so clarify exactly what is being sold and whether any additional community charges apply. Then get current insurance and tax estimates, compare $942 with nearby 2-bed rents, and model a tenant change involving both vacancy and make-ready work. One turnover could matter more than a slightly higher routine maintenance allowance.