In a house that size, you're probably renting to a family, which means kids, which means multiply the wear and tear by 2.5 (or some other frightening number).

The gross rent multiplier is the key, ie purchase for 100k get a 1k a month.  

In order to calculate the assessed value, multiply the market value by the appropriate assessment rate for the type of property.

Purchase Price 275,000.00  Interest Rate I was quoted 4.5% by a credit unionLoan Amount 206,000.00 Loan Amortization 30 years Term 10 yearsAnnual Debt Service 12,528.00 CURRENT FULLY RENTED STABILIZED AT MARKET RENT Gross Rents 22,230.00 39,120.00 48,000.00 Vacancy 7% 0 2,738.40 3,360.00 Net Rents 22,230.00 36,381.60 44,640.00 Property Management 10% 0 3,638.16 4,464.00 Leasing Costs 400.00 400.00 Maintenance Reserve 5% 1,819.08 2,232.00 Electric Common Areas 405.96 405.96 405.96 Water 720.00 720.00 720.00 Garbage 1,630.56 1,630.56 1,630.56 Property Taxes 3,742.00 3,742.00 3,742.00 Insurance 966.00 1,200.00 1,200.00 Total Expenses 7,464.52 13,555.76 14,794.52 NOI 14,765.48 22,825.84 29,845.48 Debt Service 12,528.00 12,528.00 12,528.00 Net Cash Flow 2,237.48 10,297.84 17,317.48 Debt Coverage Ratio 1.17 1.82 2.37 CAP Rate 5.3% 8.3% 11% Gross Rent Multiplier 12.3 7.0 5.7

So, the value we add will increase as the deals get larger and multiply.

My rule is to multiply your total monthly income by 50 and that should be your total, all-in cost.  

You then look at your subject property and multiply that $/Sq.Ft by the square footage in the subject house to determine the "retail value" of the subject house, aka the ARV.Some guys will also use the TAX APPRAISAL VALUE as one of the factors that they average together with the comps to get the avg.

Something that every flipper and rehabber should be aware of when they first analyze their deal.In Chicago where I do business the deals are priced as a multiple of gross income (GIM = gross income multiplier) and to a lesser extent, cap rate.

The house I am rehabbing on Sumter Street, that is governed by a .006 multiplier, meaning the value is about $380,000 and the rent is ideally about $2,100.Frankly, I was thinking about not keeping the house due to the potential for flood insurance rates that could kill the cash flow even further.

Your effective gross after vacancy and collection loss will bring the multiplier up even higher.