I am looking to buy a duplex in or around the Sunnyside neighborhood of Denver but I'm not exactly sure how to calculate what the potential rent should be. I'm sure it's not too hard, but could someone shed some light on this?
Go to craigslist and look at the apartments for rent - you can sort them by map view. Also, rentometer.com- although that's not as neighborhood specific. Rentmetrics.com used to be good but lately I haven't been able to get the site to work...
rentrange is pretty good too. Ive lived in Sunnyside since 2001
okay thanks guys. I love that area and would really like to buy my first property there, Jim!
@Jeff Libby I am very familiar with the area. It will be very hard to find something that will even cash flow in that area. You are competing with home owners. Must duplexes have been divided and flipped or haven't been touched in 30 years. With the beat up ones you are competing with rehabbers on prices. I would say a place that posts on Craig's list (meaning it's in decent shape) would start at $1,200 for a 2 bed 1 bath. A 1 bed would start at $900. If there is a working garage, I would add $100 per month per car that would fit. If it's updated with storage you could add $300-$400 depending on size. Rents start about $1.30 per square foot and go up to about $2.10 per square foot. Really it's all over the board.
Once you have a property, then you can figure the price. Craig's List is good to watch but properties less than $1,500 per month go fast so it's kind of hard to gauge the market. You really need to watch it daily to get a sense of what is really going on. Search Highlands as well as Sunnyside. People new to the area don't know Sunnyside but they do know Highlands.
Great advice, Bill. I'll look at Highlands as well. Thanks!
You need to first determine the breakeven rent price, based on your cost. Then you determine if your break even price point is below the current market rate. If it's not, then don't do the deal.
Most people don't focus on calculating the breakeven rent price, but from the perspective of developing a sound business, you always start with costs. This is coming from a person who successfuly manages a $100+ million annual operating budget, so please take heed to my advice.
God Bless You!
Thanks Michael, I suppose I need to get pre approved for a loan before I can figure out what my cost will be.
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