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Updated almost 3 years ago on . Most recent reply

User Stats

34
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8
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Aharon Najafi
8
Votes |
34
Posts

Do you include turnover?

Aharon Najafi
Posted

Of course everyone considers turnover as part of their estimate when analyzing a property but how do you do it?


For me, I started with 3 months of mortgage and reduced the forecasted net revenue by that much. I later found out (on rehabs) that it takes that long to finish the renno and then an additional 3 to place a tenant and for the non-rehab about 3-4 months. 6mo for the rehab scenario and 4mo for the non-rehab os a good chunk of change and just projects year 1 but not any other year. Because of this turnover cost my target prices are much lower than they probably should be which leads to lower offer acceptance rates and some agents gawking at the offer. 

What strategy do you use for turnover and how do you use that to ensure you have a good offer price that will still allow a good margin?

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