Calculating rents when analyzing deals

[Randy Dulac]

My realtor said to use the rents shown buy the seller when doing the deal analysis.  This seems like solid advice, except there are certain properties that seem like you would be able to get higher rents.  How do you calculate the rents when analyzing a deal?  DO you just use what the seller is getting?

[Alecia Loveless]

@Randy Dulac It is advisable to use the rents being gotten by the seller in your analysis of the property as that is also what your lender will use. Then you can use anticipated future rents for your projections.

If the current tenants have leases you have to honor them till they run out and can’t just raise the rent the day you buy it anyway which wouldn’t necessarily be advisable anyway because then you might end up with a vacant building snd no rent to pay your mortgage and bills.

It is said to assume you will never manage a property better than the person you are buying it from then you won’t be disappointed.

Of course we all strive to value add and increase rents, etc.