From the BiggerPockets Blog

 BiggerPockets Blog »

Jump to Forum View All

Click a category below to view different forum categories.

BiggerPockets

General Info

BiggerPockets Q&A, Site Questions, & Announcements

1504 topics, 14361 posts — Last Post 04/16/14, 04:34PM

BiggerPockets Exclusive PRO Area

116 topics, 837 posts — Last Post 04/16/14, 04:46PM

New Member Introductions

10848 topics, 85280 posts — Last Post 04/16/14, 05:47PM

Real Estate Success Stories

392 topics, 6102 posts — Last Post 04/16/14, 05:35PM

General Real Estate

General Real Estate

Buying & Selling Real Estate

5906 topics, 46587 posts — Last Post 04/16/14, 05:43PM

Renters

640 topics, 5791 posts — Last Post 04/16/14, 05:28PM

Get Foreclosure Help - Help Stop Foreclosure Forum

316 topics, 2557 posts — Last Post 04/16/14, 03:58AM

Home Owner Association (HOA) Issues & Problems Forum

237 topics, 1608 posts — Last Post 04/16/14, 04:51PM

Do it Yourself

653 topics, 6258 posts — Last Post 04/16/14, 05:42PM

Reviews & Feedback

Real Estate Deal Analysis and Advice

3656 topics, 29318 posts — Last Post 04/16/14, 05:10PM

Real Estate Guru, Book & Course Reviews and Discussions

1129 topics, 11532 posts — Last Post 04/16/14, 09:34AM

Ask About A Real Estate Company

736 topics, 7286 posts — Last Post 04/15/14, 02:45PM

Real Estate Investing

Real Estate Strategies

Wholesaling

5586 topics, 43652 posts — Last Post 04/16/14, 04:18PM

Rehabbing and House Flipping

3322 topics, 30896 posts — Last Post 04/16/14, 05:43PM

Real Estate Development & New Home Construction

551 topics, 4678 posts — Last Post 04/14/14, 01:02AM

Innovative Strategies

699 topics, 5992 posts — Last Post 04/16/14, 04:12PM

Tax Liens, Notes, Paper, & Cash Flows Discussion

863 topics, 6654 posts — Last Post 04/16/14, 02:24PM

Rent to Own a.k.a. Lease Purchase, Lease Options

690 topics, 4862 posts — Last Post 04/16/14, 05:35PM

1031 Exchanges

143 topics, 1052 posts — Last Post 04/16/14, 05:39PM

Foreclosure Investing

General Foreclosure & Pre-Foreclosure Forums

1686 topics, 11281 posts — Last Post 04/15/14, 03:20AM

HUD, VA, and Tax Sales

414 topics, 3086 posts — Last Post 04/16/14, 04:08PM

REOs

1212 topics, 10563 posts — Last Post 04/15/14, 01:08PM

Short Sales

1533 topics, 13117 posts — Last Post 04/15/14, 07:10PM

Landlord & Tenant Forums

Landlord & Rental Property Questions

7187 topics, 70517 posts — Last Post 04/16/14, 05:47PM

Mobile Homes & Mobile Home Park Investing

636 topics, 5127 posts — Last Post 04/15/14, 09:59PM

Investor Basics

Starting Out

7677 topics, 60276 posts — Last Post 04/16/14, 05:04PM

Investor Psychology

430 topics, 6092 posts — Last Post 04/14/14, 06:53PM

General Real Estate Investing

4710 topics, 37145 posts — Last Post 04/16/14, 05:21PM

Real Estate Investor Marketing

1728 topics, 14076 posts — Last Post 04/16/14, 05:33PM

Commercial Real Estate

Commercial Real Estate Investing Forum

1408 topics, 8971 posts — Last Post 04/16/14, 02:36PM

Multi-Family and Apartment Investing

1101 topics, 9165 posts — Last Post 04/16/14, 12:58PM

The Business of Real Estate

Real Estate Technology and the Internet

Real Estate Technology, Social Media & Blogging

638 topics, 4883 posts — Last Post 04/15/14, 01:41PM

Business Basics

Goals, Business Plans & Entities

827 topics, 7526 posts — Last Post 04/15/14, 07:32PM

Real Estate Finance & Legal

Financial, Tax, and Legal

Tax, Legal Issues, Contracts, Self-Directed IRA

2781 topics, 19978 posts — Last Post 04/16/14, 03:06PM

Property Insurance

309 topics, 2041 posts — Last Post 04/16/14, 02:16PM

Personal Finance Discussion

328 topics, 2710 posts — Last Post 04/16/14, 05:04PM

Loans, Mortgages, Credit Lines

Private & Conventional Lending Discussion

2824 topics, 19661 posts — Last Post 04/16/14, 05:14PM

Creative Real Estate Financing

1207 topics, 8759 posts — Last Post 04/16/14, 03:55PM

Crowdfunding Real Estate

35 topics, 455 posts — Last Post 04/14/14, 02:14PM

Real Estate Professionals

Real Estate Professionals

Real Estate Agents

1205 topics, 7949 posts — Last Post 04/16/14, 05:46PM

Bankers, Lenders, and Mortgage Brokers

440 topics, 1917 posts — Last Post 04/15/14, 07:37AM

Contractors

263 topics, 1662 posts — Last Post 04/16/14, 05:46PM

Local Real Estate

Local Real Estate

Local Real Estate Networking & Recommendations

1982 topics, 11569 posts — Last Post 04/16/14, 03:50PM

Americans & International Real Estate

161 topics, 566 posts — Last Post 04/14/14, 11:19AM

Foreigners Buying in the USA

62 topics, 409 posts — Last Post 04/10/14, 06:27AM

Canadian Real Estate

64 topics, 426 posts — Last Post 04/16/14, 08:34AM

Marketplace

Real Estate Marketplace

Real Estate Marketplace

14984 topics, 53858 posts — Last Post 04/16/14, 05:25PM

Real Estate Events and Happenings

162 topics, 2440 posts — Last Post 04/16/14, 05:45PM

Off-Topic

Off Topic

Off-Topic

2902 topics, 32399 posts — Last Post 04/16/14, 03:07PM

Housing News & Real Estate Market

913 topics, 8339 posts — Last Post 04/16/14, 01:11PM

BiggerPockets Real Estate Investing Summit

97 topics, 1751 posts — Last Post 04/10/14, 02:27PM

BiggerPockets Resources

Forums » Starting Out » Beginner Question about performing Rental Comps

Beginner Question about performing Rental Comps

15 posts by 6 users

Signup

· Fremont, Ohio


Hello everyone! I'm a first time poster that has been in search of a great real estate investing forum, and hopefully I've found it!

One of the problems that I have when trying to look at potential properties that I'd like to make my first purchase is, figuring out property and rental comps. I usually go to the county auditor's website for my area to find the history, sales prices and ect on the property I'm looking at with accuracy and success, but the one thing I can't get a very accurate idea is rental comps.

I know the general rental rates are in my area, but how do I best determine them if I don't know what someone down the street is paying, or someone a few blocks over?

Is there a good site that has rental information regarding to current rental comps? Or is just knowing the general rental rates in my area enough to suffice?

Thanks!



Wholesaler · Baltimore, Maryland


Well and agent can pull them for you from the multiple listing. However in my area the multiple list does not list the majority of rentals. There are sites like RentoMeter or Pad Maper that can help. Just search for sites that list rentals. Rental prices especially from large apartments or rental companies tend not to be very negotiable so prices for rentals that are available are a pretty good guide.

Networking with other landlords or property managers can be a big help too. Lastly call or knock on doors to find out rents.


Small_crab1_copyNed Carey, Crab Properties LLC
Website: http://baltimorerealestateinvestingblog.com/
http://baltimorerealestateinvestingblog.com/


· Fremont, Ohio


Thanks for the great information.

I found that RentoMeter appeared to be more helpful. My range was pretty much spot on, however I was on the lower end of that range, but I believe it's justified due to the location.

Pad Mapper was no help at all. I live in a small town of roughly 17,000+ residents, and there is not a lot of rental postings online for my town.

I prefer to start in the town I know best and can easily manage potential properties myself due to my lack of experience and wish for higher margins by doing the work myself.



Real Estate Investor · Northern, California


Hi Scott,

Here's a few things on topic that should help you out:

http://www.biggerpockets.com/rei/fair-market-rent/

https://www.biggerpockets.com/forums/52/topics/75523-how-to-find-market-rents

https://www.biggerpockets.com/forums/52/topics/68326-rental-comps---what-to-use

https://www.biggerpockets.com/forums/52/topics/39549-rental-comps



Real Estate Investor · Manteno, Illinois


Try craigslist, zillow and realtor.com.
You can get actual rental listings on there and see what other homes are going for. Do NOT use zillow for the rent estimate. Just use them
to view actual rental listings.

For the most part, rental listings are the actual rent that the owner is going to get. Its not like selling a house where the list price and eventual sales price are rarely the same.

So once you can see the rental listings, you can figure out what your house should rent for. 3 bdrm, 2 bath , 1500 sq ft built in 88...... Rental listing for 1,300.



Real Estate Investor · Audubon, Pennsylvania


Originally posted by Mike H.:
...
For the most part, rental listings are the actual rent that the owner is going to get. Its not like selling a house where the list price and eventual sales price are rarely the same.
...

That usually works, but I've seen ridiculous asking rents that no tenant would be willing to pay; for example, in a roughly $1200 neighborhood for "fair" rent (+/- $50 or $100), and somebody asking $1600 - tenants aren't willing to pay that kind of money way over the "fair" rent in that area. So you sort of have to have an inkling of what the fair rent should be.


Steve Babiak, Redeeming Properties, LLC
Telephone: 6109082183
...


· Fremont, Ohio


Great information everyone! Thanks for the help!

I have a pretty good idea of what the potential rent should be, and I've got some great reading material to further refine my findings.

I've got a few things to do before I actually make an offer on the property, but now I've got to figure out the best way I can purchase the property.

The property is listed at just over $15,000 and needs roughly $5-10,000 in repairs, and comparable comps in the area for this kind of house would be roughly $50-55,000.

So with purchase price and repairs, I'm looking at a rough estimate of $20-25,000 investment (not including taxes and closing costs or other MISC costs).

I'll have roughly $14,000 in cash in approximately three weeks, but I do not want to wait. I'm thinking of after looking at the property, of making an offer of $13-14,000 with an Earnest money deposit of $5,000 to the bank and hoping it gets accepted, giving me the time needed to pay for the rest of the property in cash.

The rest of the cash is coming from my Federal Income Tax Refund, which should be here soon.

I've never made an offer for a property for investment purposes, nor an all cash offer. Any potential issues?

I do not have a approval letter either since I plan on paying for the entire property in cash, and I do not currently have a statement to reflect the $14-15,000 in bank statements either (Only around $7,000 at the moment.)



Real Estate Investor · Northern, California


Originally posted by Scott Bartlet:
Great information everyone! Thanks for the help!

I have a pretty good idea of what the potential rent should be, and I've got some great reading material to further refine my findings.

I've got a few things to do before I actually make an offer on the property, but now I've got to figure out the best way I can purchase the property.

The property is listed at just over $15,000 and needs roughly $5-10,000 in repairs, and comparable comps in the area for this kind of house would be roughly $50-55,000.

So with purchase price and repairs, I'm looking at a rough estimate of $20-25,000 investment (not including taxes and closing costs or other MISC costs).

I'll have roughly $14,000 in cash in approximately three weeks, but I do not want to wait. I'm thinking of after looking at the property, of making an offer of $13-14,000 with an Earnest money deposit of $5,000 to the bank and hoping it gets accepted, giving me the time needed to pay for the rest of the property in cash.

The rest of the cash is coming from my Federal Income Tax Refund, which should be here soon.

I've never made an offer for a property for investment purposes, nor an all cash offer. Any potential issues?

I do not have a approval letter either since I plan on paying for the entire property in cash, and I do not currently have a statement to reflect the $14-15,000 in bank statements either (Only around $7,000 at the moment.)

You won't need an approval letter since you're not making a financed offer, but you will likely need to show proof of funds. Whenever I make all cash offers, I submit proof of funds with my offer. In your case, you might run into a problem with them not even considering your offer since it's based on some amount of money you'll potentially receive in the future.

Also, as a side note, if $14k is all you have (or will have once you get your refund), you're not leaving much for repairs/reserves. It's always good to have an appropriate amount of money in reserves for those unexpected expenses that WILL come up at some point.



· Fremont, Ohio


I should have posted the second part of my plan to get the money to fix up the property to a acceptable level for rental.

I was planning on taking a personal loan out using the property as collateral, therefore providing the money required to fix up the place.



Accountant · Lake Villa, Illinois


Scott Bartlet,

You may want to consider going forward adjusting your withholding so you are not receiving such a large refund. Why would you hand ~7k to the government over the course of the year. If you had put it into savings you could have bought a property by now or even two!

-Steven


Small_hta_logoSteven Hamilton II, Hamilton Tax and Accounting
E-Mail: [email protected]
Telephone: (224) 381-2660
Website: http://www.HamiltonTax.Net
-Steven the Tax Guy Hamilton Tax and Accounting LLC (224) 381-2660


· Fremont, Ohio


Steven,

You make great points and I've thought about it, but truth be told, I'm still a very inexperienced investor still trying to learn what I could do and ect.

By savings, are you referring to just a regular SA (Savings Account) or CD's, or other types of savings with investment in funds or stocks?

I know by claiming a higher withholding that I am losing interest and opportunity costs.

I earn an average salary for the geographic area I live and work, and I believe the reason I get such a large return is due to my dependents and qualifying for earned income credits.

Once my wife begins her teaching career, I know those credits will disappear and my refunds should drastically shrink compared to the large amounts I receive now. With saying that, I'm not a tax expert or even knowledgeable in tax areas.



Accountant · Lake Villa, Illinois


Scott Bartlet,

It really doesn't matter what type of account as long as it earns something. Even consider some type of temporary lending. Even $1 in interest is more than you are earning by giving it to Uncle Sam to use. Not to mention you do not have access to it when you need it.

Talk to your accountant throughout the year and plan accordingly. Once you have investment income over $3,200 the EIC would disappear anyway.

-Steven


Small_hta_logoSteven Hamilton II, Hamilton Tax and Accounting
E-Mail: [email protected]
Telephone: (224) 381-2660
Website: http://www.HamiltonTax.Net
-Steven the Tax Guy Hamilton Tax and Accounting LLC (224) 381-2660


· Fremont, Ohio


Thanks for the help Steven!

Back to the post Kyle J replied to about:

So, If I've only got the 7k in the bank RIGHT NOW, and the rest of what I need coming in, say 21 days or less...

What are my options without trying to get financing? I was hoping to send a large earnest money deposit to show my seriousness in my offer, but it'd have to be 5-7K. Obviously I can not show proof of funds yet until the tax return comes in (which will be less than the 21 days).

So, if I want to make an offer, what can I do? Make the offer anyway and see what happens? Will they ask for proof of funds, with in days of the offer?

So, to recap the situation:

I've found a property about two blocks from my personal residence, that is listed around $15,500.

It's a 3 BR, 1 BA with 1,110 sq, and is in need of repairs. The roof and exterior (siding) look to be in decent shape. There is no garage or shed, but does have central air.

The inside appears to have been trashed, new flooring, patch several holes (dry wall), the kitchen needs replaced and I believe the bathroom will also. (This is just from looking in the windows so far, I'm scheduling a tour shortly).

I estimate at least 5K in repairs, with no more than 10K total. I should be able to rent the property out at $500 to $600 monthly.

I hope to submit an offer of either $14,000 - $14,500 and then taking out a personal loan using the property as collateral to get the money required to rehab the place to rent-able standards. I know I'm taking a big risk here by spending all of the cash I have available and becoming cash poor, but I'm prepared to take that risk.

So, I want to make an offer for all cash with having 7k in the bank with the other 7k coming in less than 21 days, but I feel if I wait that long, the property will be gone. So, I hope to send an offer with a EDM of 5-7K and no proof of funds, hoping that it buys me enough time to get the rest of cash I'll need (my refund). Also, I'll want to get an inspection.

Reasonable? Possible? Worth a shot? Risks? (Sorry for the long posts, but I wanted to post as much info as possible for the most informed replies.)



Real Estate Investor · Audubon, Pennsylvania


Originally posted by Scott Bartlet:
... I was hoping to send a large earnest money deposit to show my seriousness in my offer, but it'd have to be 5-7K. ...

I hope to submit an offer of either $14,000 - $14,500 ...

I might make that big of an earnest money deposit on some of my purchases, but they are offers for several times your offer amount. I think you are putting in too much of an EMD, and should scale that back to no more than $2K or $3K (and maybe even less than that at those offer amounts).


Steve Babiak, Redeeming Properties, LLC
Telephone: 6109082183
...


· Fremont, Ohio


I was hoping that a bigger earnest money deposit would get a deal accepted without having to show proof of funds to purchase the rest of the property. So, therefore giving me the time needed till my refund comes in about two weeks or so now./





Sign up