Fair Market Rent?

[Skate1968]

I'm trying to determine fair market rent on a house. It's hard to determine because houses in the neighborhood aren't typically rented out. FMV of the property would be much easier to estimate and/or substantiate.

Is there a general rule for solving for 'monthy rent' if FMV of property is available? I've read that monthly rental in low/mid income neighborhood should be at least 1% of the fair market value.

i.e. A house with FMV of 168,000 should rent for at least 1,680 per month.

Can anyone offer some advice on this?

Thanks very much.

[Bees Knees]

Fair market value is what a willing buyer would pay for something, knowing all relevant facts, and a willing seller would sell, knowing all relevant facts. It is a very subjective term.

Rules of thumb calculations only work in areas where there is a history of the rule of thumb being used. The problem is, 1% of the FMV of the house itself may work in some locations, but not all. The value of anything is dependent on supply and demand. The supply of houses for sale verses the supply of houses for rent are not always the same. Thus, you cannot always tie the two together.

I would look in the local paper for advertised rentals in similar houses. If there are no examples, I would look in surrounding areas, and keep expanding the search pattern until I had something to work with.

[Skate1968]

Thanks Bees!!

I was hoping that there was a simple answer that would fully solve my dilemma but thanks all the same. I wanted to check in here first before i started researching.

Anyone else's ideas are also welcome.

[solomon]

In the Jackson case, the Court accepted the FMR provided by a realty firm.

[VT-EA]

How much rent per location

HUD posted new Section 8 rent rates in the Federal Register: October 1, 2007 (Volume 72, Number 189) in Part III Page 55939-56000. HUD will pay up to these rates so they are very low.
Another source is the latest allowances for rents in OIC calculations at http://www.irs.gov/businesses/small/...104696,00.html