Comps show me that this potential purchase rents too cheap
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Im looking to buy this property. Current rents are $710 for each unit. That comes out to a total rent income of $2130. The property is not profitable at this price. Craigslist and Rentometer show me that the average comp for a property like this are $900. I knew it felt too cheap, but what im worried about is why has the property management team that currently run the property not increased the rent to match the rest of the neighborhood/area?
Im stuck on if i should go through with the deal as im so hesitant on if $900 a unit is possible. The current tenants would be inherited and are on annual leases. They end on 28th of February 2019. Is my $10,000 set aside for repairs, painting, seeding lawn, fixing doors, etc a good reason for me increasing the rent? Do you or should you explain your reason for increasing the rent? Or should my actions of fixing up the property be a good enough reason? Is it even a good enough reason?
This is a triplex, and the only one available in the area for anywhere near its asking price. This is why im pushing for a way or a reason to go through on the deal. Please let me know your opinions and what I can do. Thank you
Most Popular Reply
I’d stop stewing over it. The deal sucks . Your barely getting the 1% rule ( with a rent that’s not even correct) and you can’t go by Zillow for anything . When this is said and done your going to have a quarter million dollar loan out on a house that makes 100 bucks a month cashflow . young Kids selling lemonade on the street corner make more than that in a month . Find a better deal or go out of state to invest so you can make a profit if cash flow is your concern