Rental Calculator numbers don't make sense
Hi everyone,
I am brand new to Bigger Pockets. I have started using the rental property calculator to assess the profitability of a typical 2 family in my neighborhood. Prices here in Riverdale, Bronx, NY are high. But rental prices are high too so I though there should be some correlation.
The average 2 family houses are advertised for $800,000. An apartment may rent for about $2,500 ($5,000 for the 2 apartments). Using the calculator I needed to go down to a purchase price of $200,000, assuming $50,000 for repair and ARV of $300,000 before the number started making sense (COC of 10.44%, positive cash flow of a couple hundred dollars, and a Cap rate of 7.10%. The point is that I kept the rental price at its true estimated rate ($2,500). Obviously you cannot get this kind of rental in a neighborhood where houses cost as low as the numbers I entered above. Am I doing something wrong? Thank you so much for caring to clarify.