CONDOMINIUM APARTMENT MORTGAGE AND CASH FLOW

by Ernesto R. Martin

The monthly mortgage payment (principal and interest) is about $861 and the insurance required by the lender (but optional if you pay cash for the unit) is about $89 monthly, so the average NET monthly income is zero*. Returning to the issue of insurance, I don't get it on my properties without a mortgage because the building is insured by the condominium and is part of the condominium management fee I pay monthly, and because I require the tenants to get renter's insurance covering the inside of the unit and liability, like a water leak from my unit that floods the apartment below.

___________________
* Obviously, this is an average. It's more on most months when no repairs are needed and much less (including negative) on a month when repairs are needed. But over time, with the assumptions we've made, the average net monthly income is zero.