If your in the market to buy a rental, knowing the expected rental rates should be part of your due diligence. The following will help you find the average property rental price in your area.
- Read your local newspapers. As you read through the classified adds, make sure you are comparing apples to apples. Homes with swimming pools and 4 bedrooms is not the same as a one bedroom studio.
- Consult your Realtor. Hopefully your real estate team has working knowledge of rentals and can utilize the MLS to help narrow down the rental price range. Be sure and ask for documentation of their comparable. Use your advisors to help gather information and to give you feedback, do not rely on them to make your decisions.
- Go online. Most metro areas now have online classifieds like craigslist. This along with other sites can give you great information. Go google…
- Go drive around. As I drive to and from work I notice a number of rental signs. If you have a location or area targeted, or you just bought a rental, beat the street. You can learn a lot just by calling your competition.
Remember that rents collected is an important part of cash flow.