How much rent should a 1.2 mil investment property pull in a month/year?

[DrPizza]

Originally posted by: drnickriviera
Here's my math. 1.2 mill 20% down to aviod PMI. 6% 30yr, $10k taxes, $3k insurance + maintenance = $7000/mo. I guess in bizzaroland CA, people will say negative cash flow is ok because "They're not making more land, your property should appreciate 30% a year" But I want positive cash flow. I'd want a 5% ROI, so $12k profit/yr. SO assuming 80% occupancy, that works out to $10k/mo

I somewhat agree... If you're not making a decent return on your investment, it might be wise to invest elsewhere. However, as I believe you or someone above mentioned, debt financing is not a bad thing. Put down 20%, allow the rent to pay the mortgage, maintenance, and provide some amount of income. Then, once you have quite a bit of equity in the place, use that equity to repeat the process with another property.

 

[Kaieye]

Just sold a 1.2 mil investment property here in SF. It was a three unit apt. located about half a mile north of Haight and Ashbury. The rent from all three units totalled about $48k a year

I would never buy again any property here in the People's Republic of San Francisco. The tenants have too much power in this city.

 

[AStar617]

On a mortgage that large, remember that all of the interest you pay is tax deductable. So as long as you tread water more or less with the income, the tax refund should make up for it quite nicely.

 

[unsped]

good luck getting 10,000 a month rent.

most 1million dollar properties in my area are getting 2,500 or so a month. you can't expect to buy a house thats quadrupled in price in the last 6 years, and expect to get quadruple the rent.

with the housing boom, alot of people who rent bought there homes at a much much lower value and you have to compete with those rental rates. remember not everyone renting million dollar houses are paying million dollar mortgages.

housing market seems ok if you want to flip a property, but buying for a rental property? i hope its like downtown newyork or sf etc...

you and about 100,000 joe blows have the same idea, here is a hint *bubble*

 

[Deleted member 4644]

Updated with info on the property.

 

[imported_Mike]

Originally posted by: LordSegan
Updated with info on the property.

Didn't think that knowing there were 4 sep. units was vital info?