Good return on a single family home

[Anthony Harris]

Hi,

had a question for my buy and hold investors. I'm trying to come up with an offer on a place that currently rents @ $850 per month. Tenant pays all utilities. house appears to need nothing. Ask price is $99,000 but owner will walk away with $85k. So, my question is what do you look for as far as ROI on a single family. Based on my calc at $850 a month for $85,000. I'm looking at roughly 7%return. But I've heard that 10-15% is where I should be. Any thoughts? Thanks!

[Jim Adrian]

@Anthony Harris

I would shoot for higher.  I would want at least $100-200 profit per month after putting money away.  Otherwise you are just going through the motion with no bang for its buck.   Back check your numbers to the 50% rule guideline.    Write down what your minimum profit per month you want as a goal. 

[Anthony Harris]

Hi Jim,

Thanks for feedback. Do you have a formula you use to calculate profits? thanks!

[Jim Adrian]

@Anthony Harris

There are quite a few on the site in the free file place... Go to "Tools" then "FilePlace"  I believe you get 5 free downloads a week. 

Here is another one to check out for tracking all your expenses.

https://www.biggerpockets.com/files/user/JimA732/file/rental-expenses-report