Purchase price to rent ratio?

[Will G.]

Often discussed but don't individual markets have a bearing on the Ratio?
What would be the most you would pay for a single family (including rehab and associated costs) for a home that rents for $900/ month? Assuming all cash deal

[Mitch Kronowit]

Originally posted by Nathan Emmert:

Originally posted by Curt Davis:

Out of curiosity... if there are markets that can get 2 or 2.7% rents... versus a home market at 1.15%... why wouldn't you go to the more lucrative areas?

Lucrative? Not the word I would choose. I would use the word "volatile". Yeah, you may get 2% the first month, but what if your crack-whore tenant with the 3 illegitimate kids and live-in boyfriend-of-the-month stop paying after that? How many months of ZERO rent will you have to wait before getting that 2% again? What if your rental gets quarantined for 4 months because it was turned into a meth lab? Or your last tenant loaded all your copper pipes and wires into their U-Haul when they left? You still getting 2%?

I'm not interested in "snapshots" of ideal situations, and these low-income, low-value properties are rarely ideal. Sure, I may get a little north of 1% in my market, but it's STEADY (solid blue & white collar tenants with stable incomes/jobs). And besides, I'm in this game for the upside, not the monthly rental scratch. Let's all meet back here in 10 years and compare total returns. :idea: