Trouble Getting Rent Estimates
I'm pretty good when it comes to analyzing a deal besides one aspect: figuring out what a reasonable monthly rent would be for a property. I can plug in hypotheticals to see what the cash flow would be, but I struggle to get a good estimate on what the place would actually rent for. I know that everyone mentions using other rental listings in the area as guides, but I'm in RI and don't often find a ton of rental listings to use as comparisons.
I asked my agent on one particular property that I looked at and he said I should be able to do $1,100 for a 3 bed unit if it's in medium shape in an area where I saw another listed at $1,275 and rentometer gave me an average rent cost in the area of $1,467. Now these are 3 very different numbers and really change the way cash flow comes in. They're all cash flow positive; however, if he is right about $1,100/month then it's not the best deal as the cash on cash would only be around 6-7%. This is obviously a dilemma since renting at $1,450 puts my estimated cash on cash return around 32%.
What is the best trick to finding the right amount before actually buying and listing a property?