I have found a duplex for 135k. Great location. Big. Back yard, and honestly just a great layout. A PM is telling me I will get somewhere between 800-850 a side. My realtor is saying 1k-1.2k a side. Rentometer is kinda useless do to there only being 2 houses for rent in the last 12 months in this area but that’s averaging around 870. The location of my duplex is way more convenient /safer/actually walking distance of downtown Lynchburg, Va. the only comparables I can find are single bed room lofts which go for 850. And two bed room lifts that go for 1100. They are in a great location to downtown but they are small and next to a busy rail road tract. The duplex is 1200sf a side plus an 800sf basement. Very spacious. And it has a backyard. It will have all new appliances also. My judgement is 1-1.2k a month a side but I’m weary of ignoring the pm. I don’t know too much about her besides that she does work near the part of town I’m buying the duplex. Should I listen to her? Or trust my judgement?

I always listen to my property manager,  all my rentals rent above market rate.  She definitely knows something that the other property mangers in town don't.  Example: my house 3/2 $1895 a month. House two doors down and across the street same sq ft 3/2 $1250 a month.  Funny thing is that property manger is my neighbor.  He says they make their money on turn over so they are not concerned on how much they can get for the property owner.  Great neighbor but he will never be my property manager.  LOL 

@Thomas Lee Nuckles Congrats on the find! I'd be more inclined to listen to the PM; her estimate might be moderated by the amount of work she will have to do. Unless I had experience I would not listen to myself very much. 

Look at it this way...........even at 800 you should be making money; at 1000 you will make a lot more. If that existed in my market I would quickly run it through my underwriting process and if it passed I'd get on it today. Sure I'd have it inspected etc but if it meets my criteria and goals I'm buying!

@Thomas Lee Nuckles how many beds/baths per unit?

If the PM has a good track record, I'd side with her over the realtor.

Besides that, maybe try calling the company or person managing/owning those downtown lofts and pick their brain a little bit.

@Thomas Lee Nuckles

You have 3 excellent sources telling you 800-870 and you are talking yourself into 1000-1200.

When you don't know you have to trust your sources. I would make the offer based on the lower numbers. 

@Brian Van Pelt

I completely understand. But the problem is that rentometer is only based on 2 houses, both is less desirable parts of town, and one was 990 the other was 750. The lofts are all very small and going for around 850-1100. The duplex I’m looking at is all walking distance of downtown. Way better location than the two houses rentometer used and way bigger than the lofts. Although the lofts are very nice. The duplex is 3bd/1.5 bath. But basement also included. That’s each side. Should I call more pms? Or trust her?

@Thomas Lee Nuckles More information is always good, but cold hard numbers are cold hard numbers.

@Brian Van Pelt

You got me there

When I'm trying to estimate rental rates, I look at what's available around the property on Zillow and and I have realtor friend run rental comps from the MLS. Also on Zillow, you can click on properties around yours and look at Price History to see (if it's a rental) what a unit was listed at and the time between the listing and the removal. From whatever information I can find, I come up with a low and high estimate.

If I can make money at the low range of the estimate and have/create equity with the purchase, I do it.  I've found that once I update the homes with little custom touches and market them with good pictures and description, they rent really fast (like, a couple of days) and at the high end of my rate estimate.  If the low end on your estimate is $1,600 ($800x2), the asking price is $135k, and there is minimal work needed to have it rent ready, that sounds like a deal I'd be interested in.

There are multiple, local, online sites that will show you what properties are renting for...have you checked those to confirm either of the numbers? For example, brownstoneproperties.com or lynchburgrenting.com They allow you to look at upcoming properties as well as currently rented properties...they site all the logistics (location, beds, baths, sf, etc). If your agent isn't well versed with rents, I think the PM is probably the more knowledgeable one given the backgrounds and daily tasks associated with each. Always better to err on the side of caution when considering an offer & crunching #'s though ;)

@Thomas Lee Nuckles Hi Thomas!

I experienced a similar thing this year. I have a sort of unique unit in a suburban area, it was expected to rent for $850 based on comps, but it rented for $250 more than that in two-weeks from listing date. I would shop other property managers, if only just for your peace of mind. There is no harm in listing it high & see if you get bites right away. If not lower the price after a few days. Your message sounds like you’re buying it either way, is that right? Does it meet your criteria both ways, you just want to maximize rent? Best of luck

@Thomas Lee Nuckles Also- $100-$200 invested in professional photos should boost the interest you get in the rental.

Have a Local Realtor run comps for your area.

When it comes time to list the unit(s) for rent, you can start high and gradually lower the List price, till you get a tenant.

@Tracy Uscinski

I meet with PM. She’s terrible. So if the home inspection goes well then I will be buying. Two things that made her terrible was after she walked the inside of the house I asked her how much it would rent for. She said “a two bed room would rent”, so I stopped her and said it was a 3 bed room. She argued with me so I just asked her to go count. She did, it is in fact a three. She never even asked to see the back yard which is import because it’s downtown. Not too many backyards to be had.

The second occurrence that made me think she’s no good is when I asked her opinion of how much I could get with the place fixed up. I explained what the plan was. She then said she just couldn’t give me an estimate without seeing completely rehabbed....

So in her eyes I have to buy the place, Fox it up, and then she’s tell what i can possible get for rent...on the the next!

@Thomas Lee Nuckles

I’d run far away from that PM due to her attitude alone. Do you need a PM, though, or are you just looking to get opinions on pricing?

I agree with you that you could likely get more for yours, probably into that range you’re considering. I know nothing of the area, I’m just going off your comments here. If the numbers work in the $800-900 range, anything else is just gravy. But I agree with the others that you can always reduce the rate if nobody bites, and FOR SURE good photos will go a long way.

@Thomas Lee Nuckles It is hard to trust your judgement when you don’t have the day to day experience in the field and little data, but you can’t beat a safe place in a particularly desireable location, if reasonable price. I hope it goes well for you. And I have seen some horribly mismanaged properties, so yes, professionals have to earn your trust. I always trust myself...and I always feel a little sick when I buy a property...but the feeling is tempered by the potential in a property.

@Thomas Lee Nuckles

Does your realtor have rentals? If not...ignore them. So many realtors love to give opinions about investment properties and they have zero experience or understanding.

I’d be more inclined to go with the PM, but ultimately it’s your job to figure it out. Sometimes PMs low ball because it’s easier for them to find a renter, and they often make their money on the turn-over anyways. They don’t really try to get you the highest possible in rent.

Get a couple PM opinions. Do more research. If you still don’t feel confident, assume the worst when running your numbers. Then try renting it at the higher rate. You will know if it’s too high.

@Alissa Engel

She does have investment properties. But I will be contacting another pm today. I was not at all happy with the first. The only indication that she cared for the property was that she showed up. After that it was all down hill.

@Thomas Lee Nuckles

You are getting too emotional about this purchase. Any experienced rental property investor doesn't really need the input from a property manager or a realtor to tell them how much they can rent it for. If it's a deal its a deal, and just run your numbers conservative and purchase the property.

@Mark Fries

Yea. You’re right. But it’s the rest so it’s hard not to. If all goes well today then I’m buying. The numbers add up even at 800/month and the are will bring over 1000/month.i have a home inspection today. If it comes back in decent shape then I’ll be the owner of a cash flowing duplex.

@Thomas Lee Nuckles

That's the right outlook. It's nice to get opinions from other people but the only one that matters is the decision that you make based on the information that you have. Even if it rents out on the lower end you are still going to make good money and then you can do gradual increases over the next 2 or 3 years and really be crushing it

@Thomas Lee Nuckles you are not using good comparable properties. Lofts down town are often very desirable, even with smaller square feet. You can't compare a 1-2 bedroom loft to a 3 bedroom duplex with a yard. It will likely attract two different types of tenants. In my area, three bedroom units go for a good premium over 2 bedrooms. That would lead me to believe rents are on the higher side of the numbers you threw out. BUT I don't have enough information to say for sure. 
Here is what I would do. Ignore Rentometer, because it is useless in my experience. Look at the competition and see what they are renting for. The best method to do this is run a search in Zillow for 3 bedroom units in that zip code. Look for similar properties with same number of rooms, square feet and location. Check active listings first. You can also look up neighboring properties and often in the History tab you can see what it last rented for. All my rent prices are determined by using Zillow as a bench mark. Even if you work with a PM, do your own homework on Zillow first so you can talk intelligently.

You also need to be objective. You are getting really hung up on the value of the backyard, but not every perspective tenant sees value in that. Maybe they will if they are a family or someone with a dog. I am just saying, be objective, rather than pushing and hoping for more than you can get.