Posted by Kristine-CA on November 03, 2009 at 10:58:19:
In Reply to: Where's the Money? posted by Dr. B. (OH) on November 03, 2009 at 08:06:14:
Since I live in CA I know nothing about the 1% rule....is that a rule? Are
you in an area where a 150K house gets a $1500 rent?Is 50% the industry standard. I use 40% in all my calcs and the
numbers don't provide cash flow with that either.The old time landlords who make cash flow work where I am start with
much lower numbers. They want a 20-30K house with a $600-750
rent. As you can imagine, they didn't buy much the last 7-8 years.
They are buying again now though. As you can imagine both the
neighborhoods they work and their tenant pool is what you would call
challenging. They are able to do way better than 40% on expenses,
because they provide way less for a tenant pool that will accept less.