How much can you charge for $100,000 property?

[Mrtreasuretoupee]

If you bought a property for $100,000 how much do you think you could charge for rent? I know that cost of living varies a lot but if you could buy a house in your neck of the woods for 100k how much do you think you could charge for rent?  I'm trying to gather data for deciding future investments.

In my area I'd say between $750 and $800. 

[Alim Nassor]

Maybe 1100 bucks.  That meets the 1% rule, but in my area there are much better deals on cheaper properties.  I just bought one for 60k that is bringing 900, and have a contract on one for 49.5k that should bring 825. 

[Cwadda]

Use comparable rents in your area. That's the best way to know your competition and price points.

[ketchup]

It 100% depends on where you are.  Where I've lived, that probably ranges from $700-1400, a pretty meaninglessly-large range.  I bought the house I live in for almost exactly that amount, and I could probably rent it out for about $1300, but it's also probably appreciated slightly since I bought.

[Dicey]

Heh, heh. No such thing as a $100k home here. $100k down payment might get you started...

Answering to say that the correlation of cost of property to rental income varies widely across the country. Mat I gently suggest that your question implies you might benefit from more research and study before you make any offers?

[marty998]

Heh, heh. No such thing as a $100k home here. $100k down payment might get you started...

Answering to say that the correlation of cost of property to rental income varies widely across the country. Mat I gently suggest that your question implies you might benefit from more research and study before you make any offers?

$100k will pay the stamp duty tax here. You need the deposit on top of that :)

Maybe 1100 bucks.  That meets the 1% rule, but in my area there are much better deals on cheaper properties.  I just bought one for 60k that is bringing 900, and have a contract on one for 49.5k that should bring 825. 

Why would the renter not buy the place for $60k? If they are paying $13k a year in rent, they could have a fully paid off place in 4 years (assuming 20% deposit).

[clarkfan1979]

I bought a single family home in Fort Myers, FL in 2012 for 95K. I did 10K of repairs by myself and spend 6K on a new a/c system with new duct work. In 2012 it would have rented for 1300/month. I got 1675/month last year. If the current tenants stay, they get it for 1700/month. If I get new tenants, I will ask 1750/month. 

[waltworks]

Why would the renter not buy the place for $60k? If they are paying $13k a year in rent, they could have a fully paid off place in 4 years (assuming 20% deposit).

Because 90% of the population (at least in the US) doesn't have 2 nickels to rub together and lives paycheck to paycheck.

-W

[gaja]

In my neck of the woods, $100k will get you about 25 m2 (270sqft) studio/one bedroom. Typical rent seems to be around $1k/month.

[Alim Nassor]

Heh, heh. No such thing as a $100k home here. $100k down payment might get you started...

Answering to say that the correlation of cost of property to rental income varies widely across the country. Mat I gently suggest that your question implies you might benefit from more research and study before you make any offers?

$100k will pay the stamp duty tax here. You need the deposit on top of that :)

Maybe 1100 bucks.  That meets the 1% rule, but in my area there are much better deals on cheaper properties.  I just bought one for 60k that is bringing 900, and have a contract on one for 49.5k that should bring 825. 

Why would the renter not buy the place for $60k? If they are paying $13k a year in rent, they could have a fully paid off place in 4 years (assuming 20% deposit).

Because they live like renters.  It's a struggle for them to even come up with 1st months rent and deposit.  A 12k down payment might as well be a million bucks.

[MaikoTsumi]

Because they live like renters.  It's a struggle for them to even come up with 1st months rent and deposit.  A 12k down payment might as well be a million bucks.

This is such a blatant generalization.  There are people who struggle, but I screen these kind of renters out.  My market has a 47% rental rate and all my rents are in the $1100-$1450 range.  My renters could easily purchase the houses they are renting.  I love these millennial renters, high income and no desire to own.  This area is one of the most affordable areas in the country to own, but rentals remain high.   

[HPstache]

$100K might get you a single wide on a small piece of property.  You could probably rent that out for $900 or so a month.

[Alim Nassor]

Because they live like renters.  It's a struggle for them to even come up with 1st months rent and deposit.  A 12k down payment might as well be a million bucks.

This is such a blatant generalization.  There are people who struggle, but I screen these kind of renters out.  My market has a 47% rental rate and all my rents are in the $1100-$1450 range.  My renters could easily purchase the houses they are renting.  I love these millennial renters, high income and no desire to own.  This area is one of the most affordable areas in the country to own, but rentals remain high.

Uh, I was speaking about MY renters, since the question was asked about THEM, not your renters.

[clarkfan1979]

Heh, heh. No such thing as a $100k home here. $100k down payment might get you started...

Answering to say that the correlation of cost of property to rental income varies widely across the country. Mat I gently suggest that your question implies you might benefit from more research and study before you make any offers?

$100k will pay the stamp duty tax here. You need the deposit on top of that :)

Maybe 1100 bucks.  That meets the 1% rule, but in my area there are much better deals on cheaper properties.  I just bought one for 60k that is bringing 900, and have a contract on one for 49.5k that should bring 825. 

Why would the renter not buy the place for $60k? If they are paying $13k a year in rent, they could have a fully paid off place in 4 years (assuming 20% deposit).

Many of my friends in their 20's were against buying homes. They moved to a higher paying job every 2-3 years and homeownership didn't make sense for them. They really enjoyed the mobility. I tried to convince a few to buy a home and just rent it out when they move again. However, they didn't think they had the skillset to be a landlord so it would add stress to their life. Many of my friends didn't buy a home until they were around 35 years old. When they felt like their next career jump was at least 5 years away, then they started buying homes.

[waltworks]

Remember, it's possible for BOTH the renter and landlord to be making an optimal decision - if you rent for $1500 a month, when you could buy the house for $100k, that seems dumb but...
-What if you plan to move in a year? Or you're not sure?
-What if you hate doing home maintenance and fixing appliances?
-What if you have other (tax advantaged?) investment opportunities that you'd rather max out?

Remember, if your renter bought that house and sold it a couple years later, they'd probably walk away with nothing (or worse) after figuring in the various costs of buying and selling, unless the property appreciated a ton. Even worse, their downpayment money would have just been sitting in place instead of providing a tax break and generating dividends/capital gains.

Many renters rent because they have to. But there are many who rent because it makes sense for their lifestyle and financial goals.

-W

[adamcollin]

It’s better to know the current rental prices in your area. It will help you to set a fair rent and attract potential tenants.