Boston, MA · Member since 2017 · 74 posts · 8 votes
BRRRR sounds great! But how can I tell if my local rent market can bare a certain level of rent increase? If I update a building, how will I know people will be willing to spend a higher amount of money on rent for "bells and whistles"?
Example: A town's median income is 40k with a population of 8500, and sees moderate to low levels of seasonal tourism. So the average person can afford 1k/mo in rent. Average rent for a 2 bedroom is between $650 and $700. How could I figure out if there would be demand for nicer, $800-$900 2 bedroom rentals? Are there rules of thumb to determine just how much to dump into renovation?
1. I would reach out to your local property management companies, being a small town there might only be a small hand full. Ask to see what kind of listings get 800-900 a month.
2. look at the listings yourself of marketed rentals, act as a tenant and go see listings in the two ranges. I think you will quickly get a sense of what the market is supporting.
3. Go to your local meet ups or the closest town that has them and talk with other investors. Find out what they are doing.