I'm about to buy my first SFH, but the home has not been a rental property before. I want to make sure I don't overpay, so I understand that I need to know how much the property could rent for. My question is, how do I determine that with a reasonable degree of accuracy? What sources should I be looking at?
Take a look at other rental ads in that area and try and see where yours would fit in competitively - Craigslist, Trulia, Zillow, Hotpads, Facebook Marketplace, etc.
Do you know any experienced landlords/property managers in the same market as the house you are purchasing? if so, they may be able to give you some added insight.
I'm still trying to get to know professionals in the area. Nearest rentals from what I can see are several blocks away in a city of about 75000 people.
Several blocks away are probably good comps. You should be able to find 5-10 comps in the area, similar number of bed/bath and get a feeling.
Is your house in better condition or worse? Nicer finishes? Bigger? Backyard? Etc. everything makes your rent go up or down a bit compared to others.
This is something you should know before you even make an offer on an investment property. Look at realtor.com/rentals and see what other homes in the area are renting for. If there is no data, ask more than you think it is worth and see how many hits you get. You obviously have no idea what you are doing, so I really suggest that you walk away from this until you learn a few things.
@Anthony Dooley No offense, but one reason I HAVEN'T bought the property yet is because I'm well aware that I still need to learn a few things, and that's sort of why I'm here. I'm checking out properties, contacting PMs, asking questions, etc. I've read quite widely, but I realize that's not enough. I'm just looking to find out the best possible source I can use to estimate potential rent for a property that's never been rented before. I don't think it's fair to state that "You obviously have no idea what you are doing." I'm just not 100% there yet. Hence, my decision to post this in the "Investor Basics" section.
@Agus Hartono Yes, I wondered whether sitting down with a good local PM might give us the sort of information we need. They might give a more unbiased perspective in some regards. Good advice. Thanks.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing