Are you running the numbers on a McDonough rental and wondering if it will actually cash flow? You are not alone. In today’s rate environment, a solid plan and accurate local inputs matter more than ever. In this guide, you will learn exactly which McDonough numbers to gather, how to plug them into a simple formula, and how to pressure test your results with quick scenarios. Let’s dive in.
What drives cash flow in McDonough
McDonough sits inside the Atlanta metro with convenient access to I‑75. Many renters commute to regional job centers, so proximity and travel time can influence demand and lease speed.
Leasing activity often peaks in late spring and summer, so plan for seasonality when setting your timeline and vacancy assumptions.
New single‑family construction and build‑to‑rent communities in Henry County can shape rent ceilings and leasing competition. Check what is delivering nearby before you set target rents.
For high‑level benchmarks, review the Atlanta metro section of HUD Fair Market Rents (FMRs) to understand how your target rent compares to regional norms. You can browse the latest FMR data on the HUD site under Fair Market Rents.
- See county context on population and housing from U.S. Census QuickFacts for Henry County to understand broader market scale and growth.
Helpful links:
- Review metro-level rent benchmarks on the HUD Fair Market Rents page: HUD Fair Market Rents
- Explore county demographics on U.S. Census QuickFacts for Henry County
Gather the right local numbers
Rent comps
Pull 30–60 day active listings and recent leased comps for similar single‑family homes in the same subdivision or nearby zip. Match beds, baths, age, lot size, and finish level. Note any concessions like free weeks or landlord‑paid utilities.
Sources to check: Zillow Rentals, Rentometer, Apartments.com, local property manager sites, and community forums. Use them for data points, then cross‑check against multiple comps before you set your rent.
Sales price and list trends
Use recent McDonough sales within the last 3–12 months for similar homes to gauge fair purchase price. County sales records and MLS-based portals can help you triangulate realistic numbers.
Property taxes and assessment
In Henry County, estimate taxes using the county assessor’s value and millage rate. If you do not have the assessed value yet, use a conservative rule of thumb like 0.5% to 1.5% of property value per year and refine it once you have the actual assessment and current millage from the Tax Assessor or Tax Commissioner.
Insurance and flood risk
Request landlord or dwelling fire policy quotes for the specific address. In Georgia, a typical single‑family landlord policy can range from about $800 to $2,000+ per year, depending on replacement cost, age, and endorsements. Confirm flood exposure with FEMA’s map tool before you finalize a premium estimate. Check the FEMA Flood Map Service Center for the latest mapping.
Mortgage rate and payment
Use current market rates to estimate principal and interest. The Freddie Mac Primary Mortgage Market Survey publishes weekly rate trends you can reference. See the latest rate context on Freddie Mac PMMS, then run an amortization calculation for your specific loan amount and term.
Operating expenses to include
- Property management: 8% to 12% of collected rent, plus a one‑time leasing fee that may equal 50% to 100% of one month’s rent.
- Vacancy and credit loss: 5% to 10% for a stable suburban market. Adjust for seasonality and your leasing plan.
- Maintenance and repairs: budget about 1% of property value per year, or use a monthly reserve like $100 to $200 for older homes.
- Capital expenditures: plan separately for big items like roof, HVAC, and appliances. Many owners set aside $500 to $2,000 per year depending on age and condition.
- HOA and owner‑paid utilities: use actual figures when applicable.
- Miscellaneous and compliance: reserve a modest buffer, for example $200 to $600 per year.
Use the cash flow formula
Here is the clean, line‑by‑line math you will use for any McDonough single‑family rental:
- Gross Scheduled Rent (GSR): monthly rent × 12
- Effective Gross Income (EGI): GSR × (1 − vacancy rate)
- Operating Expenses (OpEx): taxes + insurance + maintenance + management + utilities + HOA + misc + CapEx reserve
- Net Operating Income (NOI): EGI − OpEx
- Annual Debt Service: annual principal and interest payment
- Cash Flow Before Tax (CFBT): NOI − Debt Service
- Cap Rate: NOI ÷ Purchase Price
- Cash‑on‑Cash Return: Annual CFBT ÷ Cash Invested
- Break‑even Occupancy: (OpEx + Debt Service) ÷ GSR
- Required Gross Rent: (OpEx + Debt Service) ÷ (1 − vacancy rate), then divide by 12 for required monthly rent
McDonough example: single‑family rental (hypothetical)
This illustration uses round numbers and standard ranges. Replace every input with your property’s quotes and actual comps.
- Purchase price: $300,000
- Down payment: 25% ($75,000)
- Loan: $225,000, 30‑year fixed at 6.5% (estimate from current trend)
- Monthly rent assumption: $2,100
- Vacancy: 8%
- Property tax estimate: 1.0% of price = $3,000 per year
- Insurance: $1,200 per year
- Maintenance reserve: 1% of price = $3,000 per year
- CapEx reserve: $1,500 per year
- Property management: 8% of rent = $2,016 per year
- Miscellaneous: $300 per year
Calculations:
- GSR: $2,100 × 12 = $25,200
- EGI: $25,200 × 0.92 = $23,184
- OpEx: $3,000 + $1,200 + $3,000 + $1,500 + $2,016 + $300 = $11,016
- NOI: $23,184 − $11,016 = $12,168
- Annual debt service: about $1,422 per month × 12 = $17,064
- CFBT: $12,168 − $17,064 = −$4,896 (about −$408 per month)
- Cap rate: $12,168 ÷ $300,000 = 4.06%
- Cash invested: $75,000 down + roughly 3% closing costs ($9,000) = $84,000
- Cash‑on‑cash: −$4,896 ÷ $84,000 = −5.83%
- Required monthly rent for break‑even: about $2,586
What this means: at this price, rate, and expense set, you would need higher rent, a lower purchase price, a larger down payment, or a lower rate to get to positive cash flow. This is common in higher price, lower rent combinations, so planning and negotiation matter.
Scenario sensitivity: fast reality check
Here are three quick versions using the same purchase and expense structure. Only rent changes.
Scenario A, conservative rent $1,900
- NOI: $10,152
- Annual cash flow: −$6,912 (about −$576 per month)
- Cap rate: 3.38%
- Cash‑on‑cash: −8.23%
- Break‑even monthly rent: about $2,586
Scenario B, market rent $2,100
- NOI: $12,168
- Annual cash flow: −$4,896 (about −$408 per month)
- Cap rate: 4.06%
- Cash‑on‑cash: −5.83%
- Break‑even monthly rent: about $2,586
Scenario C, optimistic rent $2,300
- NOI: $14,184
- Annual cash flow: −$2,880 (about −$240 per month)
- Cap rate: 4.73%
- Cash‑on‑cash: −3.43%
- Break‑even monthly rent: about $2,586
Use this structure to test price reductions, buy‑down points, bigger down payments, or self‑management. A small change to one lever can flip the results.
Build your calculator like a pro
Create a simple spreadsheet you can reuse for every McDonough property. Include these editable inputs:
- Property address or zip
- Purchase price, down payment, interest rate, loan term
- Expected monthly rent and other income
- Vacancy rate
- Annual property taxes and insurance
- Property management fee and leasing fee
- Annual maintenance and CapEx reserves
- HOA and owner‑paid utilities
- One‑time closing costs and initial repairs
- Miscellaneous fees
Have the sheet auto‑calculate:
- GSR, EGI, line‑item OpEx, and total OpEx
- NOI and annual debt service
- Cash flow before tax, annual and monthly
- Cap rate and cash‑on‑cash return
- Break‑even occupancy and required rent
- A quick sensitivity table for rent, rate, and expense changes
Include short notes in the sheet on where to source each input. For example, point users to HUD FMRs for a high‑level rent check, Henry County tax resources for millage, FEMA for flood, and Freddie Mac PMMS for rate context.
Due diligence checklist for McDonough rentals
- Pull at least three solid rent comps in the same subdivision or zip, with similar beds, baths, age, and updates.
- Confirm current Henry County millage and estimate taxes from the assessor’s value.
- Get two landlord insurance quotes and check FEMA maps for flood risk.
- Price utilities and HOA from provider or community sources if you will cover any items.
- Validate rate and payment with a lender quote using today’s terms.
- Budget for vacancy, management, maintenance, and CapEx using the ranges above.
- If timing a move‑in, align your listing with spring or summer when activity often rises.
Ready to evaluate a McDonough rental?
If you want a reality check on a specific address in McDonough or anywhere in Henry County, share the basics and we can run the numbers together. With 25+ years in Metro Atlanta neighborhoods, we will structure the analysis around local comps, current taxes, and today’s financing so you can decide with confidence. Reach out to Latrice Mitchell to start your evaluation.
FAQs
What vacancy rate should I use for a McDonough single‑family rental?
- A common starting point for stable suburban markets is 5% to 10%. Adjust up if you expect a slower lease‑up, or down if you have strong comps and can list in peak season.
How do I estimate Henry County property taxes for a new rental?
- Use the county assessor’s value and current millage to estimate the bill. If those are not available, apply a conservative rule of thumb like 0.5% to 1.5% of value per year, then refine with official county figures.
What quick rule can I use to screen deals before deep analysis?
- The “50% Rule” suggests that around half of gross rent may go to operating expenses, not including mortgage payments. It is a filter, not a final answer, so always run line‑item math.
Do I need to budget for a property manager in McDonough?
- If you plan to hire one, a typical fee for single‑family homes is 8% to 12% of collected rent, plus a one‑time tenant placement fee that can equal 50% to 100% of one month’s rent.
Where can I find reliable rent and rate benchmarks before I comp a property?
- Use HUD Fair Market Rents for high‑level rent context and the Freddie Mac PMMS for weekly mortgage rate trends, then verify with local comps and a current lender quote.
