Hi All,
Some years ago i used to great affect a simple formula (im sure Steve supplied it) to calulate what i SHOULD be paying for a property based on its rental return, in order to test to see if its likely to be cashflow positive…does anyone have that formula as i cannot find it anywhere? It was a great starting point especially in getting a snapshot of a properties potential to be CFP.
Cheers,
Problem solved, i have it, sorry for wasting a psot.
can you maybe post it up for us?
Love to get a hold of that calculator please maxminder. can you post a link to it please. Every little bit helps in the long run.
Cheers
parraboy
No probs, it was simply the 11 second rule which i notice has been heartily bagged by many on the forum. Its not meant to be a definitive guide, its simply a snap shot of potential. I bought a property some years ago (which is still own) which has been cashflow positive from day one and rent over the term has doubled. I remember discounting many properties as they were simply miles away from the 11 secnd rule, this one got close, after further due diligence i offered the price the 11 second rule sugegsted and whala..cash flow positive propertry since. Lucky possibly…
(Weekly Rent (or if vacant rent potential) / 2 ) x 1000.
So weekly rent is $260 / 2 = $129 x $1000 = $129,000
All other due diligence proving acceptable, $129,000 would all but gaurentee the property will be cash flow positive month in month out.
The challenge is finding them….but they do exist.
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