I'm looking into investing into rental properties and I've been reading a lot about return on investment. What's the average ROI do you look for when making a deal? Is it. 05%, .08%, higher? How do you even decide at all?
@Danual Berkley if you ask 10 different investors you will get 10 different answers. Many even measure differently and have varying goals. Depends on the type of property and the market. Are they investing for market appreciation or forced? Decide for yourself what are your goals and criteria and go for those. All the best!
Most investors like to see 12% or better. Depending on your strategy the ROI will vary. When I do BRRRR projects I like to see 50% CoC return. This way all my money is returned in two years or less.
This question is deceptively complex. I'm new to this game, but every agent and listing i look at throws out cap HUGE rates that most of the time make no sense to me. I believe, at least in the North East, that cap rates are lower in reality then generally advertised once you add in ALL the expenses that will be required.
As per the index, the average ROI in real estate investing is around 8.6%. We consistently hit the 20% mark and sometimes higher with value add projects. Using the BRRR method, you can pull almost all of your money out and that really can get the ROI up high when factoring in what you have in the deal. The syndications projects that we do are typically from 15-20% IRR to the investor.