Developing my criteria

[Devin Hedgepeth]

Hello, I am starting to develop my criteria as an investor. I know that this will be specific to me, but does anyone suggest a good starting point, reading material, articles, or personal examples of their criteria they look for in a solid cash flow rental property? Thanks, Devin

[Account Closed]

Originally posted by @Account Closed:

Hey @Account Closed, could you share with me what your criteria are or what successful real estate investors would use?

For rent growth, would I expect to see this as RTP growth or specifically gross rental income growth?  If it matches inflation (~3%) is that good enough?  What's your target?

I look for rent growth of about 6% and appreciation of about 9%+.  Basically I want to see my property value double every decade.

My RTP is usually .8%.  If you are in a 2% RTP area you are probably NOT seeing any rent growth or appreciation.  So what good I the 2%?  When my properties increase in value $100,000 I expect rent to increase by $800.  That is how you earn profit.

http://www.mercurynews.com/2016/09/25/bay-area-wag...

Case in point: Over the five years that ended in July, the median home price has rocketed up 94 percent in San Mateo County, 74 percent in Santa Clara County and 67 percent in San Francisco, according to figures from the CoreLogic real estate information service. While the median in the East Bay is lower, home prices there have increased even more: up 105 percent in Contra Costa County and up 99 percent in Alameda County.

How sweet to put down $100,000 on a $500,000 house 5 years ago and sell today walking away with $600,000!