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Kevin SobiloPoster
#2 Tenant Screening Contributor
#2 Tenant Screening Contributor
- Rental Property Investor
- Hanover Twp, PA
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BRRRR Calculator: Gross Rent Multiplier Question
Kevin SobiloPoster#2 Tenant Screening Contributor
#2 Tenant Screening Contributor
- Rental Property Investor
- Hanover Twp, PA
I've been looking at the Bigger Pockets BRRRR calculator and I think the "gross rent multiplier" is being calculated incorrectly.
The formula it appears to be using is:
Purchase Price / (Gross Monthly Income *12)
That would be correct for a buy and hold I believe, but for a BRRRR deal, I think it should be:
(Purchase Price + Rehab Cost) / (Gross Monthly Income * 12)
The reason I think that is because the purchase price alone doesn't get you a house that is rent ready. You need to rehab it first to have a fair comparison with a buy and hold deal.
Any thoughts?