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re: Minimum monthly gross income on a rental property as a % of the purchase price?
Posted on 1/9/25 at 12:50 pm to Fat Bastard
Posted on 1/9/25 at 12:50 pm to Fat Bastard
quote:
you CAN get 2% maybe not at initial acquisition but over the years with the raising of rents. so many here are so ignorant on this. I have done it. All mine are between 1.5 and 2% RTV.
I’m not in the business but that’s what I was thinking. Whether you buy today or bought years ago. Rent prices have only increased. So what you charge in the first year of ownership isn’t what you will always charge.
I’ve actually never been in a property that doesn’t try to increase rent year to year.
This post was edited on 1/9/25 at 12:51 pm
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Posted on 1/9/25 at 2:06 pm to Fat Bastard
quote:But that's a bet on future assumptions and not on in-place cash flow. You could make a similar argument about almost any asset. That doesn't mean it's a good buy at the time of purchase - or a good IRR over the life.
you CAN get 2% maybe not at initial acquisition but over the years with the raising of rents. so many here are so ignorant on this. I have done it. All mine are between 1.5 and 2% RTV.
Posted on 1/9/25 at 2:08 pm to tigerbacon
quote:
Think about this, stock market can easily give you 10% gains even if you went safe dividend investing. So on 200k, if you not bring in 20,000 a year ion rent your losing money on your investment
Maybe I’m looking at wrong, but I’m looking at owning rental properties the opposite of how you are looking at it. To me, rental income is much less volatile over time than the stock market, so if I can get 10-12% of purchase price as gross annual rental income, that seems like an awesome way to diversify my investment portfolio with something that will far outperform safer vehicles like bonds. And if you get lucky on a property or two, and count the asset appreciation over time, you will outperform the stock market. So, reasonable potential of less volatility with higher gains than the S&P 500? Yes, please!!
Posted on 1/9/25 at 2:13 pm to Big Scrub TX
quote:
But that's a bet on future assumptions and not on in-place cash flow
nobody said the cash flow was bad. it could still be great. mine were. it does not have to be at 2%. all we are discussing here is RTV. not all the factors that go into cash flow. that is just 1. there are many. your cash flow can go from very good to great by raising rents.
nobody is assuming anything i am telling you EXACTLY what happened.
nobody is saying buy bad with bad number and use future estimates. you completely have changed the conversation here. the OP' was questioning RTV. not all the rest.
This post was edited on 1/9/25 at 2:17 pm
Posted on 1/9/25 at 3:01 pm to auwaterfowler
quote:
Maybe I’m looking at wrong, but I’m looking at owning rental properties the opposite of how you are looking at it. To me, rental income is much less volatile over time than the stock market, so if I can get 10-12% of purchase price as gross annual rental income, that seems like an awesome way to diversify my investment portfolio with something that will far outperform safer vehicles like bonds. And if you get lucky on a property or two, and count the asset appreciation over time, you will outperform the stock market. So, reasonable potential of less volatility with higher gains than the S&P 500? Yes, please!!
Thats how I see it. If you don't buy a dud you're getting a monthly dividend plus you have an asset that over the long term will almost assuredly go up. If real estate isn't up at least some in a 10-15 year period, something is going badly wrong.
Posted on 1/9/25 at 4:46 pm to auwaterfowler
To me real estate is riskier. You have insurance to pay. Then you have maintained which include ac/heat every 15 years, roofs every 20. Any damage done by renters. Flood damage or other national disasters. You have insurance on it being a rental. You have taxes to pay. All that eats into the profit margin. Not to mention you either pay a mortgage company to handle the rentals or you spend time handling the rentals. Shoot buy QQQ and VOO every month and get you 10-20% a year profit with no effort or taxes on it until you take it out. But you making money on the taxes portion that should more than cover it anyways.
I thought about buying rentals but decided it was to risky for me and I prefer the safety of stocks
I thought about buying rentals but decided it was to risky for me and I prefer the safety of stocks
Posted on 1/9/25 at 5:18 pm to Fat Bastard
quote:OK? I'm saying that if you are getting a gross 8%, then it's nothing to write home about.
nobody said the cash flow was bad.
quote:Just not sure what you're talking about. Gross rent is 100% of the cash flow you are going to ever receive - unless you are charging like fees or something to apply or break the lease or whatever.
all we are discussing here is RTV. not all the factors that go into cash flow. that is just 1. there are many.
quote:Just like I said - if you make the assumption that you can raise rents a lot, and it actually works out, then of course that's good. The problem is you buy IN-PLACE rents.
your cash flow can go from very good to great by raising rents.
quote:Yes, we know your trade went well for you. That has basically nothing to do with the question asked.
nobody is assuming anything i am telling you EXACTLY what happened.
Posted on 1/9/25 at 8:08 pm to auwaterfowler
quote:
To me, rental income is much less volatile over time than the stock market, so if I can get 10-12%
I used to think like that. But a lot of stuff came into focus the time my future NFL tenant blew his car up in the front yard….and I only knew because someone postered the instagram link on the OT.
Posted on 1/9/25 at 9:06 pm to lsuconnman
quote:
my future NFL tenant blew his car up in the front yard….and I only knew because someone postered the instagram link on the OT.
He actually made it to the NFL?
This post was edited on 1/9/25 at 9:07 pm
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