For example, consider a $ 100,000 property that brings in $ 9,600 per year in net income (net
means gross rents collected, less expenses, such as property taxes, insurance, maintenance, and property management).
Not exact matches
Based on a median
gross rent of $ 1,288, that
means that the median income is insufficient for a family to
rent an apartment in Glendale.
This
means using the 50 % rule, or allocating say 20 % of
gross rents aside for maintenance / vacancy reserves.
That usually
means they have a
gross annual yield of at least 8.5 %, a
gross rent multiplier of less than 12, and a cash flow of at least $ 5,000 annually (with 25 % down and 5 % interest).
Depending on the situation and the circumstances of the particular transaction, a tenant may be successful in negotiating a cap on CAM by negotiating a «
gross» lease (
meaning the
rent and all pass - through expenses are consolidated into one fixed base
rent figure), a «base year» deal (whereby the tenant will only be responsible for its share of increases in operating and similar expenses over the amounts for such expenses in a base year) or any other number of hybrid scenarios.
So what does this
gross rent multiplier of 10x
mean?