What is a Good Rate OF Return on Rental Property?

[curling]

Do you think 12.5% after taxes and insurance is any good?

 

[pintoca]

I would say 2 grenades and a home porn video is fair

 

[redguru]

I think the standard used by Realtors who manage property is 25% above the PITI.

 

[migcor]

Most people expect 8-10%.

 

[curling]

I think the standard used by Realtors who manage property is 25% above the PITI.

But I am paying cash for it.

 

[redguru]

But I am paying cash for it.

I'd go to 25% above your monthly outlay minimum

 

[slat1]

It all depends on what type of return you are talking about. Cash on cash? Is it a cap rate you are buying it at?

The bigger question is this... How do the reserves look? Is there a full accounting of everything? Are there costs projected forward to replace boilers, the roof, the parking lot, paint etc.

 

[curling]

It all depends on what type of return you are talking about. Cash on cash? Is it a cap rate you are buying it at?

The bigger question is this... How do the reserves look? Is there a full accounting of everything? Are there costs projected forward to replace boilers, the roof, the parking lot, paint etc.

Yea, I got some cash reserves for that stuff(but I would rather use it for 06' gsxr 1000) but I didn't take that in consideration as far rate of return. After that crap probably about 10%

What do you mean cap rate?

 

[FreakMonster]

Standard rule of thumb is 75% Occupancy rate.

So if your Gross rent is:
$1400
x .75 factor
=$1,050
-$1000 Your PITI

=$50 your at a positive net gross rental income

 

[MasterBates]

Me and my brother are buying up rental properties near universities.

Last one we bought, the payment can be either 1400 minimum monthly payment or 2000 interest only. The rent is 2800. Some cashflow and since its in a very good area the appreciation rate is about 8-10%.

 

[bran987]

Yea, I got some cash reserves for that stuff(but I would rather use it for 06' gsxr 1000) but I didn't take that in consideration as far rate of return. After that crap probably about 10%

What do you mean cap rate?

cap rate = (net operating income / market value) x 100

10% after taxes and all expenses isn't bad curling

you could do much worse. you aren't including estimated annual appreciation are you?