← All tools
Ken Lam Realty · Tools

What's the most I should pay for this rental?

Start from the rent, not the asking price. Pick your goal and see the highest price that still works.

$/mo
%
$
My goal
$/mo
×
%
More settings (rate, vacancy, expenses)
%
%
%
$/yr
$/mo
%
%

Defaults match T146: 5% repairs + 5% CapEx + 8% management = 18% of collected rent. Insurance and utilities are estimates.

Max price for your goal
$0
Max price · cash flow goal$0
Max price · DSCR goal$0
Max price · cap rate goal$0

At the asking price

Cash flowAfter mortgage, every month$0
DSCRNOI ÷ mortgage payments0
Cap rateNOI ÷ price0%

Quick screen

1% ruleMonthly rent ÷ price. Passes at 1% or more0%
GRMPrice ÷ yearly rent. Bay Area 2–4 units: often 13–180
NOI: $0/yr · Mortgage (P&I) at asking: $0/mo Cash needed at max price: $0 · Price that passes 1% rule: $0
This is a starting number for your offer, not an appraisal. A higher price can still make sense if you are betting on rent or price growth. That's a bet, not cash flow.

Good / ok / weak cutoffs are rules of thumb, not rules. Vacancy, insurance, rate add-on and GRM range are estimates.

Ask Ken Watch 15-sec video

Email this max price to yourself

Ken will reply and can check it against real rents and sold comps. No spam.

Or text: 408-666-2825

Next steps

  1. Not sure about the 18% and the other costs? Build the real expense list with T261.
  2. Run the full numbers (NOI, cash-on-cash, 5-year IRR) at your offer price in T146.
  3. See what happens if rent drops or rates go up: T264 stress test.
  4. Check the rent you typed. HUD fair market rents for Santa Clara and Alameda are in T51.

Many people get this wrong: "if the asking price is fair for the area, the rental works." Sellers price off sold comps. Your max price comes from the rent. In the Bay Area those two numbers are often hundreds of thousands apart.