I have heard that a formula of 100 times one month rent is a reasonable way to determine value of a residential property for rental purposes. Does anyone know if that is correct? I spoke with a banker and he said that lenders today will use a number as high as 120 times one month rent. But then I talked with an older investor who said he never purchases above 70 times one month rent. I assume that each formula generates a ROI. What multiple are other investors of rental property using and why?
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