What kind of profit should I be looking to make I'm currently looking at a two unit for 67,900 the units could be rented out for at least $600 a piece.
This is opinion, not fact.
A really good, aggressive growth is 15% or better. You can do well with 10%. I think most real estate investors are aiming for 12% or better with the occasional home-run investment that yields 20-30% returns.
I think profit margin would be the difference between income and profit, after expenses and debt. I'm highly leveraged, not leveraged over the value of the property, but I borrowed part of the 20-25% equity/down payment upon purchasing. Even with this, my one investment has a margin of 17%, and the other 11%. If I had not borrowed some of the equity/down payment, the margin would be 31%, and the other 22%.
Cash on Cash return, I hear people target 12-20%, but that is based on the cash you input into the opportunity.
For your opportunity, we would need to know if you are financing the purchase, or using cash. Assuming 50% of the income would go to expenses, until you have the actual expense data, then that leaves $600 of profit, if there is no debt/mortgage. If you need help, let me know.
@Claire Mahon If they rent for $600 each, what are your other costs? You have property taxes, repairs, vacancies and perhaps a loan. You want to look at your numbers factoring in all of the expenses.
If you can get 10% or better CoC (Cash on Cash), your doing good in this current market.
@Christopher B. I'm completely confused , but I offered 47,900 there are 2 apartments potential rent of 650 a month minimum 550 ,
So income 1100
Zillow predicts expenses at 272 monthly .
My husband would maintain, there's a tenant that has 50 $ off his rent because he takes care of snow removal , lawn , I think garbage is taken care of by the town . This is my first rental venture
Zillow estimates costs at 272
Income potentially between 1100- 1200
@Nathan G. If I'm doing the math correctly I would be looking at 66 percent I believe ? Estimate
@Claire Mahon you are not accounting for expenses like taxes, insurance, they can see, maintenance, capex, Property Management.
Vacancy, not "they can see"...
@Claire Mahon If you are getting $1100 from the rent and paying cash, you also have property taxes, insurance at a minimum. You will also have repairs and maintenance costs. I wouldn't use Zillow, or any website, to estimate costs. You need to use your real numbers.
Take a look at this blog article.
@Nathan G. Thank You ! It seems I have some research to do , 😁
@Nathan G. I used to bigger pockets calculator and got 41 percent cash on cash