Thanks to all past BP contributors, as someone looking for my first turnkey purchase this year. Specifically, the most actionable advice I've read is to do your own due diligence.
To summarize: due diligence - physically visit (no problem), find sales comps (redfin), talk to multiple realtors (how-to?), find rental comps (how-to)? The last two are the ones I'm wondering about.
Question 1: How to talk to multiple agents? Most agents aren't geared toward investors and if I do find one that is, I'll be wasting their time, because I'm already working with a turnkey seller. Any suggestions? What have other turnkey buyers done?
Qyestion 2: How to find rental comps? Unlike sales comps (redfin is great!!), I'm running into a shortage of data. craigslist map search is a great resource (ONLY IF THEY HAPPEN to have comps). I'm guessing in some markets, MLS or some other site must be driving the rental market. If craigslist doesn't have the comps, where else do I turn?
@Kay Yu - MLS will have rental listings so you can definitely check the asking rent price for the area(s) you are interested in (using realtor.com or other websites). If you can physically visit the area you are considering then look for rent signs and call the owner or property management company to get an idea of rent prices, specifics on the property, etc. If you need property management services this could also help you build a list of PM companies that are active in your area to interview once you have acquired a property. It definitely pays to have a relationship with a realtor be upfront/honest with them and be prepared to pay them for their time to provide their professional opinion on comps, rental value, the neighborhood,etc. or find someone through BP that might have access to MLS.
4@Kay Yu you might stop by your local title company and ask for the person who handles your type of closing, then ask that person who is good investor realtor and maybe a couple of investors you might get with for help. As @Gautam Venkatesan said, Zillow, realtor.com Craig's list and MLS all list rentals. Get with it! And have some fun! Sincerely. Tom
For the agent part, you said "Most agents aren't geared toward investors and if I do find one that is, I'll be wasting their time, because I'm already working with a turnkey seller." - What are you needing from an agent if you are already working with a turnkey seller?
For checking rents, I would call an unrelated (to the seller) property management company and tell them the address of the house(s) you are interested in and get their opinion on rents. Property managers will know better than anyone or anything online what realistic rents are.
You can use this website to check rental comps
@Kay Yu look for rent signs and call and ask about the properties for rent. Location, size, condition, location, who pays what utilities etc. That is the best way to see what the market is doing.
Great questions. I haven't bought turnkey, but I've looked into it a ton. Here are my thoughts:
Question 1: How to talk to multiple agents? It would probably be easy to get tidbits of free advice - most agents will give you cliched answers for free. It's a starting point.
A happy medium would be to connect with other investors who are active in the area. I'll take a savvy investor over a novice RE agent any day!
But for me, no joke - I would actually consider hiring a RE agent to act as your buyer's agent, and paying them out of your pocket. If you work with them, it will probably be around 2.5%-3% of your purchase price, and they will be able to give you an expert view on the rent-ability, area, etc.
Qyestion 2: How to find rental comps? I completely agree about Redfin for sales comps!
Not all states use the MLS to track rentals. And even if they do, a relatively small portion of rentals make it to the MLS. You're doing the right stuff and looking in the right locations. Zillow is OK. Craiglist's map feature is decent - though those are often outdated or inaccurate for one reason or another. I haven't had good luck with Rentometer or other automated comps.
So, two additional considerations:
It's counter intuitive, but I believe that if you have a good understanding of rental rates for the city, and the street/immediate neighborhood of your rental, you can get pretty dang close... even if the street doesn't have any comps year by. You'll end up much closer than the automated services... For example, the going rate for a newer nicer 3X2 in Charlotte is 900 - 1500. Areas with decent schools on decent streets tend to be around 1200-1300. My place is on the NW side of town (not preferable) where housing prices and rentals are around 15% lower than comparable areas in the NE. So, around 1100 is my number.
With all of that said, one of the reasons I would consider hiring an independent expert/RE agent is to provide a solid rental estimate. My RE agent is also my PM, so she can speak to both in the same breath - and is easily worth that 3%.
Let us know what you decide/figure out!