Wife and I are looking at properties near my parents in another state. Through BP we've talked with some very helpful people. One is with a Turnkey property sales and management group. Now I'm trying to complete due-diligence by running numbers in BP calculator.
My basic assumption is that I must consider the premium on a rental property above zillow's estimate price as the "rehab" cost in the Rental Property Calculator. This does a few things:
- how much of a loan I can seek
- how much cash I really need up front
- It would more accurately reflect any appreciation (though I'm planning on being a buy and hold investor, and equity is less critical than positive cashflow, IMHO)
Turnkey(TK): Asking price: $35000, with tenant $650/mo.
TK: $300 setup cost
Closing Cost: $1000
In BP's Rental Property Calc I then would put that the
- rehab cost would be $16800 (16500 premium + $300 setup)
- the value after $18500
So, what have I missed? Does this make sense as a way to use the Rental Calculator for analysis of turnkey property?
What's up Casey! Not sure if you're still looking for answers here, but I wouldn't ever use the Zestimates or Redfin estimates for a realistic market value. Without already working with a good broker in that area, the easiest DIY comp'ing I've found is with Redfin. If the area where you're looking is covered by Redfin, you can use the map. Just hone in on the area around the property of interest, and adjust the filters to only show sold properties in the last 3, then 6, then maybe 12 months if those more recent time frames don't yield many results. Then click around the results on the surrounding streets to find comps with similar bd/ba counts and square footage. If Redfin doesn't cover that area, you can also pull actual solds on the Zillow map, but it doesn't let you filter on the dates of sale. Appraisers look for ideal comps in the 6 month range. Moral of the story is don't trust Zestimates or the Redfin estimates - pull the actual solds. Hope it helps.