Should you analyze a potential rental property using market rent?

[Account Closed]

I'm looking to make an offer on a duplex and my analysis is based on the current rent. Should I be using the market rent when analyzing? The property will be delivered vacant and the comps are the same amount as the asking price.  When I use the current rent, my calculator tells me to offer lower than the asking price but when I use the market rent, my calculator tells me that I'm ok to offer the asking price. Any feedback will be greatly appreciated! Thanks for your time!

[Tamara Deering]

If the properties are vacant there is no current rent.  You would run your financials based on market rent but your offer should be based on the value of the property.  You need to compare the duplex with the sold duplexes in similar condition and location to see what those properties have sold for.  Also, deduct for any repairs that are required.  Properties from 1-4 units are evaluated like single family residential homes not using commercial yardsticks like cap rate.