HOW MUCH RENT SHOULD A FOUR-PLEX PRODUCE?

DEAR BOB: I am considering buying a fourplex rental property for $259,000. How much rent should the four units produce to make this investment pay off? --Jason N.

DEAR JASON: The exact answer depends on the amount of your cash down payment and the mortgage payments.

As a very general rule, the total monthly rents should ideally be 1 percent of the property's market value.

To illustrate, with a $259,000 purchase price (of course, never pay full asking price), the property should produce gross rent of $2,590 per month. However, because rents have not kept pace with rising property values in most cities, don't be surprised if the attainable rents are not that high.

Check local rents before purchasing the property to see if it will be a profitable investment for you.

The new Robert Bruss special report, "How to Sell Your House or Condo for Top Dollar in a Buyer's Market," is now available for $5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internet delivery at www.BobBruss.com. Questions for this column are welcome at either address.

(For more information on Bob Bruss publications, visit his
Real Estate Center).

Copyright 2006 Inman News