It could be a great deal or crazy high rent depending in your locale. It would be the latter in my area.

Yes. I live in Houston and 1% of value is relatively easy to do here. I shoot for 2%, but that is not as easy. We have also been achieving up to 5% in some markets.

Matthew Donowho
Sterling Income LLC
[url=http://www.sterlingincome.com ]www.sterlingincome.com [/url] www.sterlingincome.com

wow. we have 350k assesed value home that is having hard time to rent for $1800. If i asked for 2% or 7k month they would want me to share the good stuff I was smoking.

I think it depends upon the area and size of the property, but yes. We have many over 1%.

I have one that's at 2.4% and one that's at 2.8%.

1% - 1.5% is common around me.

It's easier to find that kind of cash flow in multi-unit rental properties, since you're just dealing among investors, and cut out those pesky homeowners who are always driving up the sales price.
In my area, the values tend to be higher than the lease amount, but part of that is that I made the mistake of over-improving properties in the ghett0 - a mistake I won't make again.
Best of luck finding your target return,

_________________________
Brian
Residential Lease - courtesy of EZ Landlord Forms

I agree with Brian. It depends on the type of property you have (multi unit vs. single family)... the more multi units, the greater the portion of your rents will make up for the sales price up to a certain point.

I would say near 95% are less than 1% here in Toronto... (purely anecdotally anyways)

I would say 1% is reasonable in my area up to a certain price, about 150K. After that it probably drops closer to .75% per month.

Agreed, here in the Minneapolis/St.Paul metro, monthly rent prices of 1% of market value is pretty steep. We are closer to 0.80-0.85%.

Not to show my ignorance but where would you get the market value? Wouldn't you need an offer/sale to establish that or are you using comps?

If a house is on the market for 300K how would you fix a rent for each of the 6 units? Gross income is 57K, expenses 27K net profit 27K. Just curious as I'm looking at one at the moment... maybe to list..or buy. Thnx

Are you kidding me? Where in Houston are you getting 1%? TX is good but not sure we're THAT good.. hmmm

I get around 1.8% for properties in stable neighborhoods around here. You can get 4% if you are willing to go into less desirable neighborhoods.

1% of it's value is great!!! That would work out to a 12% annual return on your investment!!

I just bought a condo in Scottsdale for $300,000 and have a tenant moving in Jan. 1st that is paying $2,300/month....

Anyone getting 1% should be seeking out investors up here (Vancouver, BC)... Here I am selling properties for over $500,000 that rent out for about $1,700/month...