Specialist · Houston, TX · Member since 2015 · 1k+ posts · 1k+ votes
7y
I think that can be a very tough question to answer. It would first depend on the area. For example Los Angeles will have a much different set of numbers then Dayton Oh. Not that one is better then the other but they are different. It would really depend on the investor and what their goals are. I think you would want to make sure that they are in line with what the rest of the market is doing in that area. You dont want to be an outlier at the top or bottom. Also it probably depends on the cycle time of year for that area. If you are planning to sell in winter and that is an area that slows down then you do not want to sell it based on summer numbers.
Wish I could give a better answer, but unfortunately the answer is.. It depends on many variables
San Mateo, CA · Member since 2015 · 61 posts · 30 votes
7y
Depends on the location and future potential, but generally speaking for SFR I like to aim for at least 5-8% CoC return with 12-15% IRR over a 10 year period. Hope that helps! (also eager to learn what other investors are expecting from SFRs).
Specialist · Houston, TX · Member since 2015 · 1k+ posts · 1k+ votes
7y
I think that can be a very tough question to answer. It would first depend on the area. For example Los Angeles will have a much different set of numbers then Dayton Oh. Not that one is better then the other but they are different. It would really depend on the investor and what their goals are. I think you would want to make sure that they are in line with what the rest of the market is doing in that area. You dont want to be an outlier at the top or bottom. Also it probably depends on the cycle time of year for that area. If you are planning to sell in winter and that is an area that slows down then you do not want to sell it based on summer numbers.
Wish I could give a better answer, but unfortunately the answer is.. It depends on many variables
Lender · Santa Rosa, CA · Member since 2017 · 283 posts · 255 votes
7y
What Turnkey providers are operating in the area? I would check their listings and marketing and see how that compares to yours and what valuation it gives. That is a great start.
Are you planning to list it? Your agent/broker should be able to give market opinion and when you talk through it with them, should give you a good base line. You can check comp sales on zillow or RedFin pretty quickly as a verification.
Two or three data points should let you see a pattern. If it doesn’t converge, then you need more data points unfortunately.
@steve Rosenberg is spot on - if you are in a heavy appreciation area, probably zero or negative CoC return with 20% downpayment. If you are in a very rough area, 2% rule ($700 rent/mo means $35K sale price) is probably expected.