Your question is a little too broad to be able to answer it properly. I can tell you what I've found so far in my properties. All are 2 bdrm, 1 bthrm, 4-unit buildings. ROI for me has been between 60-110%. But I've seen ROI's as high as 240%. Of course all this also depends on what your downpayment is and how much you're setting aside in your expense calculations.
Many of us are doing no money down deals, which makes calculating ROI impossible.
If you put down $1 and get back $10,000 in a year, that's a 10,000% ROI.
ROI is a good measure in notes, stocks, and other paper investments, (and for RE if you're lending money to RE deals) but it falls short of showing the whole picture in RE from an investors point of view, such as labor, time commitment, headaches, equity, etc.
Let me rephrase my question.... What should the roi calculated to be per month for a rental per unit.... for an example: a one bedroom apartment renting for 1300 a month , cost per month is 1100 (cost included mortgage, maintanance, tax ....). So, with that in mind what is the cut off point between a good investment and a poor investment. (assuming its positive cash flow, but at what %)
It might depend upon other investment vehicles available to you.
If your potential rental investment will require $12000 out of pocket for your downpayment and closing costs, plus another $3000 in cosmetic repairs to make it rentable, you end up with $15000 invested in this property.
If your $15000 investment will generate $250 monthly cash flow, then this works out to a 20% ROI. If this is a better yield than any other long term investment available to you, and you have the temperment to be a landlord, then you may decide that this is good enough for you.
Your question is a little too broad to be able to answer it properly. I can tell you what I've found so far in my properties. All are 2 bdrm, 1 bthrm, 4-unit buildings. ROI for me has been between 60-110%. But I've seen ROI's as high as 240%. Of course all this also depends on what your downpayment is and how much you're setting aside in your expense calculations.
[addsig]
Many of us are doing no money down deals, which makes calculating ROI impossible.
If you put down $1 and get back $10,000 in a year, that's a 10,000% ROI.
ROI is a good measure in notes, stocks, and other paper investments, (and for RE if you're lending money to RE deals) but it falls short of showing the whole picture in RE from an investors point of view, such as labor, time commitment, headaches, equity, etc.
Let me rephrase my question.... What should the roi calculated to be per month for a rental per unit.... for an example: a one bedroom apartment renting for 1300 a month , cost per month is 1100 (cost included mortgage, maintanance, tax ....). So, with that in mind what is the cut off point between a good investment and a poor investment. (assuming its positive cash flow, but at what %)
It might depend upon other investment vehicles available to you.
If your potential rental investment will require $12000 out of pocket for your downpayment and closing costs, plus another $3000 in cosmetic repairs to make it rentable, you end up with $15000 invested in this property.
If your $15000 investment will generate $250 monthly cash flow, then this works out to a 20% ROI. If this is a better yield than any other long term investment available to you, and you have the temperment to be a landlord, then you may decide that this is good enough for you.