What's The Formula For Renting Investment Properties?

If you are contemplating of buying a property solely for investment sake you must look at it quite objectively and see if you would stand a chance to make profits from it. There are several simple formulas to decide on rents for investment properties.

The one that I will discuss is called the Gross Rent Multiplier or GRM. To calculate the GRM for a property, we need to know the sales price of the property and also the possible proceeds from rents. Considering data from similar properties in the same locality tend to yield realistic results. Either a monthly Gross Rent Multiplier or a Yearly GRM could be used.  

Monthly GRM =  Sales Price of a property
                           Potential monthly gross income  
               
While Yearly GRM =  Sales Price of a property
                                        Potential gross income yearly

GRM calculations can also be used to compare properties in same localities with similar maintenance costs. In this case, the properties with lower GRM numbers are more profitable. On the same token, properties from different areas cannot be compared using the GRM as the maintenance expenses could be quite different for them.

Looking for the averages for rental in Dunedin Florida Causeway area.  210 Bunker Hill Lane, 1152 sf, 2b/1.5b/careport/balcony/views of water from front and back/no condo fees.  Townhome, zillow appraisal at 155,000-200,000.