Factoring in cost of advertising for rental properties

[Stephen Brieloff]

Hi everyone!

I'm located in Chicago and am looking at investing in a multi-family this year. In my market, and I assume many others, if you want to list a place for rent through a realtor on the MLS, it costs 1 month's rent. Of course there are other ways to go about advertising for new tenants, but this gives the widest exposure.

How do you factor the cost of advertising when running their numbers on potential investments? Do you simply take the cost of one month's rent and divide it by 12 months? Or do you consider the lifespan of an average tenant (example, 1.25 years) and factor that in? The cost of advertising and losing a full month in pretty steep, so curious to hear how people think about it and keep it in mind for their calculations.

Thanks! 

[Stephen Brieloff]

@Jeff Burdick thanks for the input! Thinking of it as 11 months of rent in revenue is a good way to go. I'm looking into Berwyn and Cicero right now (a bit out of the city), as well as Hermosa. Where are you looking?

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