Posted by JoeKaiser on April 24, 2002 at 19:12:04:
One of the reasons I can’t stomach parts of the Sheets course is this notion about what the rents “should be,” based on a formula or “rule of thumb.”
You mentioned what Carleton says, here’s what Joe says, “a house rents for whatever it rents for.”
Now, the casual observer or the uninformed will read that and conclude it isn’t very helpful. Trust me, if I had to choose between the two, with money on the line, I’d take my approach 11 times out of 10.
Here’s reality. If you’re talking rentals, to make houses cashflow in most parts of the country, you must be able to buy them at deep discounts. The $110k house will cashflow nicely when purchased for 50 cents on the dollar, I suspect.
Find someone who really really wants to sell, work the magic, and then find someone who really really wants to buy. You do that and cashflow happens.