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A. A. wrote:
>
> I have been investing in the stock market for many years,
> and been happy with the returns. However, I was recently
> approached with a more secure investment opportunity
> where I can buy a real estate to offer as rental property.
> I never invested in real estate before, and I'll
> certainly do a lot of research if I decide to do it.
> However, I'd only like to know for now what kind
> of monthly return can be expected from it. For example,
> for each $100k of a rental property value you invest,
> what's the minimum rent you would accept, and the maximum
> reasonable rent that the tenant can be expected to pay?
There isn't a good linkage between amount down on a
property and amount of rent charged.
To find amount down, look at the current asking prices in
the area, figure in some amount to offer under that, and
the financing available will determine the amount down.
The financing will then tell your your cash flow out. Figure
about 20% more than that for RE tax, insurance and such.
To find current rent prices, look in the newspaper. That's
the cash flow in. Charge higher than that and you'll get
few renters. Again, take some percent off that for
landlord overhead like repairs, lawyers and such.
Depending on geography the price to purchase might be
close to a match or very far away from a match. More
down, more chance of a match. So bascially you're
looking for inflation to eventually raise the rents for a
positive cash flow, or you're looking for a do not-wanter who
is not going to hold out for market price.
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Re: Real Estate Monthly Rate of Return
