When investing in rental properties, the break-even point is 35% above asking price, not 20% below market value, because investors must account for repair costs ($18,000 for a 1,200 sq ft property), vacancy losses ($8,000), and management fees ($5,000).
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My Brother Inherited Our Dad’s Rental Property #ShortsHinzugefügt:
Most homeowners think they can buy a tenant-occupied property for 20% below market value and still make money.
Wrong. The average cost to repair a 1,200 square foot rental is $18,000 or $15 per square foot. Add in $8,000 for vacancy losses and $5,000 for management fees and your break even is 35% above asking. I've seen people overpay by 40% because they didn't account
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