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Who needs the headaches of being a landlord when the Fed has helped turn the stock market into a money printing machine on 'roids since 2009...
Indeed, the monetary climate—primarily the trend in interest rates and Federal Reserve policy—is the dominant factor in determining the stock market’s major direction. -- Martin Zweig
There looks to be a significant amount of money to be made.
Let's say you purchase a $1 million apartment with 9 units and a 10% cap rate.
That's 100,000 per annum in profit.
What are the chances, at an apartment worth about $100,000 each that you will have crappy tenants that do drugs, trash the place, don't pay, etc?
How difficult is it to evict someone? How is that process performed?
Thanks.
Eviction laws vary state to state and even city to city.
Tenants, it depends on the market. In San Francisco renters are fighting for apartments, so landlords can be very picky where as Las Vegas has lots of inventory, so landlords may have to accept average tenants. You should conduct a credit report and request pay stubs.
There are many costs associated with being a landlord such as maintenance, repairs, insurance, property taxes etc. Unless you have a massive down payment or pay cash, you'll be lucky to break even when it is all said and done.
$100,000/yr profit is not bad. I work for a landlord, I never heard that term Cap rate. Oh well, every small business has their own lingo.
Actually, the returns can be more, if you know how to do your own maintenance. What utilities do you pay for?
Cap Rate is standard across the country. Every real estate agent, seller or buyer will refer to the cap rate, but if you are an employee, I guess you wouldn't come across that term. It's just a ratio between net operating income / price/value. A 10% cap rate is above average in most markets across the US.
Cap Rate is standard across the country. Every real estate agent, seller or buyer will refer to the cap rate, but if you are an employee, I guess you wouldn't come across that term. It's just a ratio between net operating income / price/value. A 10% cap rate is above average in most markets across the US.
Well going by OP's business models for a restaurant I'm surprised he's not going with a 20% cap rate.
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