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Is 4% an average rate of return for landlords? 4% of what: the capital you used to buy the house? So if I buy a house for $100,000, I get $4000 in rent per yea
by tppiotrowski 4y ago
Is 4% an average rate of return for landlords? 4% of what: the capital you used to buy the house?
So if I buy a house for $100,000, I get $4000 in rent per year? Or I get $4000 in my pocket after I use the rent money to pay the mortgage and property tax?
- toomuchtodo 4y agoTypical RE return targets are 10-20%. Anything less than that and you might as well be in public securities. There are different ways to calculate returns: IRR, cash on cash, but it’s immaterial for this discussion. TLDR you want returns higher than you can get elsewhere easier. (you must not just develop housing, you must lock it up from investors if you want to ensure long term affordability; capital is callous, uncaring, and voracious for returns)