Investor · Helena, MT · Member since 2015 · 37 posts · 12 votes
I'm new to Bigger Pockets and just going to jump in.
My question is; If you pay a mortgage on a property, how much (as a percentage) of a return on your money (monthly payment in this case) do you expect to consider it a good investment? For example, let's say your payment is $1,000 and you rent the property for $1,200, making a 20% return. Does that return include overhead and reserves?
I'm guessing I can probably find an answer to this somewhere on the site, but as I said, I'm new and just wanted to try out this forum. Thanks in advance for your reply.
I like a 15% cash on cash return. If I had piles of cash in the bank I would be comfortable with +7% cash on cash return. It think it depends on where your are and where you want to be.
Investor · Richmond, VA · Member since 2015 · 139 posts · 43 votes
11y
You would need to figure out all your expenses. I'd recommend reading here on BP, then read some more. A general rule of thumb is the 50% rule, where half the collected rental fee goes to expenses like vacancy, maintenance, management, etc.