It is extremely hard to provide a specific answer for your general question. What did the investor pay for the property? What does the investor expect the property to do for him or her? Where is the property located and what will the market bear in rental price? How flexible is the investor in tenant selection as far as credit worthiness goes? What condition is the property in? These are just a few of the questions.
Is 8% a good return? It may be. However, 10-12% or more is even better. Also, when computing the ROI is the investor taking into consideration any tax benefit derived from depreciation.
I believe the honest answer to this is an investor should expect the highest return the rental market will bear, while achieving as much assurance of stability in income as possible.
Rob Baird, CA RE Lic. #544165 (One of the oldest, active licenses in CA)
Aug 18, 2010