General prophet margin for rental ??

13 Replies

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.  

@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

@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.