Quote:
Originally posted by nicion
I would be very interested in a rental property in the $80-100k range which would consistently rent for $1500 / month. Rent (yearly) typically amounts to roughly 5% of the property value, so for an $80-100k place, don't expect the monthly rent to be much beyond $400. Note that this describes the situation in Australia, though I assume it would be very similar in the US.
What you describe is a return of between 18% and 22.5% - basically sounds too good to be true.
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Nicion, you are correct for the most part, however, boredjerk did say that he lived in a college town with outrageous rental rates. The amount of rent you are able to collect varies widely based on your location. For instance, I live in Green Bay, and I am currently renting a 1200 square foot 2 bedroom apartment (vaulted ceilings, fireplace, attached garage) for right around $600.00/month. I was looking at several places in Chicago, and a similiar apartment there would cost me almost $1400/month. I would assume there are similar variations with duplexes or other rental properties.