Target Cash on Cash return ?

[Matt Caldwell]

Newbe here...any rough rule of thumb on target cash on cash return for a buy and hold investment property?

[Jeff Rabinowitz]

If you have never done any deals it may be too soon for you to spend much time on this question. Look for properties, inspect them, analyze them, learn the neighborhoods. What returns are the properties that look like good fits for you returning? Is that enough for you to jump in the game? Is it higher than other investments available to you would be? Will it compensate for your time or allow you enough room to pay for a property manager? If so, buy something and begin. You will learn as you go and will better understand the true impact of vacancies (a major expense that can become a killer if you procrastinate completing repairs, turnovers, and placing tenants), maintenance, legal/court costs (poor tenant screening will increase those expenses). Once you establish a baseline with a couple properties you will be in a much better prepared to compare potential returns of different properties and target achievable return rates for new acquisitions.