how to calculate offer in a renters market?

Question

the regulare 70%Xarv-repairs-fees doesnt work for renters market since the investor is not renovating.

1.)how can i come up with an offer for a property in a renters market?

2.)also how can i tell if a property is in a renters or buyers market??

the only answer for 2 i can think of is if its in a major city then it would be renters or if there is just average properties that do not look fully renovated(granite countertops,new appliances) then it would be a renters market and buyers market is opposite (suburbs and fully renovated).

Yusuf Sarii · Answer

so basically multifamilys are usually rented and how about single family homes are they usually bought. if other wise how can u tell if a single family home is in a buyers or renters market.

also national average cap rate is 6 precent so should i use that as a basis.

Bryant Brislin · Answer

That's not really how we look at things in the States...I'm assuming you are international?

Many neighborhoods have both for-sale/regular homes and for-rent/apartments. As far as making offers on a multifamily (aka for-rent) property, it's usually based off of a cap rate and what cap rate buyers are comfortable paying in that particular market.  If it's just a duplex or triplex, and there are various duplex and triplex comps sales in the neighborhood that seem to follow a trend, i.e. 500k for a duplex, 700k for a triplex, then you can kind of use that as guide of where to price it.  But usually for anything larger, a buyer needs to know the NOI so that they can base a price on a cap rate.