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I've been investing in real estate for a copule of years now. I
invest for the long-term. Meaning that I'm looking to landlord (or
pay someone to do that) and not flip properties. With this mindset, in
the market that I've been investing in (various parts of Texas), I
have been able to net $400 or so of positive monthly cash flow for each
$100K of mortgage. If I was able to do the deals without mortgages
(which I wouldn't do), the positive cash flow would be somewere around
$1200 or so of positive monthly cash flow for each $100K. So for what
rent I'd accept, I'd add up all expenses (plus allowance for
managment fees and monthly amount to pool funds for repairs) and then
add in the monthly cash flow that I'd want. I then compare that to
prices in the papers etc. for what similar properties are renting for
in the area. If the numbers do work out, then that property is
immediately off of the table. If the numbers do work, then I do the
rest of the necessary due dilligence (i.e., inspect further, look for
value propositions, etc.).
Hope that helps.
Gary Brolis
http://www.MechanicsofMoney.com
http://www.MechanicsofMoney.com/blog.php
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Re: Real Estate Monthly Rate of Return
