1%-2% rule? Need your experience

[Rick Oaks]

Im new to larger apartments. I’m looking at a 8 unit building with $5100 month in rents. Building is in reasonable shape and units have various amount of updates Overall decent building in rural and safe area. Owner wants 510k ( 1%). My concern is in my area rents and appreciation are basically nonexistent. Am I unreasonable to think that it should be closer to 1.5%- 1.7%

340k - 300k sale price?

[Russell Brazil]

Buyers dont set prices.

Sellers dont set prices.

Markets set prices.

You need to see what other properties in the area are selling for.  There are many ways to value a property, and all of them should get you within a similar price range on this property. Cap rate, price per unit, comparable sales, gross rent multiplier etc.  See what other small 5-25 unit properties are selling for within proximity then extrapolate from there.