How analyze Baltimore City Property Rentals

How analyze Baltimore City Property Rentals

Silver Spring, MD · Member since 2016 · 4 posts · 0 votes

Hey Bigger Pockets Community! 

I am new to investing and I am interested and buying rental property in Baltimore.   A real estate agent brought to my attention three rentals available for purchase that are already tenant occupied.  Met the owner who has also been maintaining the property himself.  I went to see the properties and it looks like work has been done in the property, but just the bare minimum.  There was new plumbing put in, new water heater and heating system, (but no central air). Laminate flooring on the first floor.   Basements are unfinished.  I asked him to provide copies of actual bills, copy of the current lease, and 1 years worth of tenant payment history.  (Nice guy, However, he does not strike me as the type of person who keeps records)  He said he does have led certification certificate for each property.  I met the tenants, and was able to talk to them, they said that they have been living in the unit for about two to three years.  On was an elderly lady who admitted that she has been late with the rent, but it was because she was sick, but she does pay.  He is asking 30k for each property.  

Questions:  

1) How do I determine the value for the property? 

2) Does anyone know of a good inspector and appraiser I could use in Baltimore City? 

3) Is there anything else to consider in order to decide whether or not to invest in property?

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Ned CareyPro Member
Moderator
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
10y

@Maria McLemore The are many ways to evaluate properties.Comparable sales is the most common for SFH. However what a homeowner will pay for a house does not determine whether it will be a good investment. Cash flow is another way, generally more appropriate for investors.

There are many threads here on BP about evaluating deals. There are also deal calculators under the tools tab.

It is also important to consider your goals. Some properties will cash flow great but have little potential for appreciation. Other areas may not cash flow well but may have higher odds of appreciating. Do you want cash flow now or to grow your wealth for the long run.

The housing stock in Baltimore is very old. The condition of the property has a tremendous affect on the value.

How much are the rents?. You don't have to give the exact address but knowing the area can help us help you.

My gut tells me that $30K is an OK price but no particular bargain.

See this reply in the discussion

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  • Hyattsville, MD · Member since 2016 · 79 posts · 14 votes
    10y

    Hey Maria you can use Zillow and Redfin for some quick quotes. You get a whole of the MD land assessment and taxation info line for that I  believe. The price is nice. what part of Bmore is it? I too plan on purchasing a multi unit for rent. Good luck, would love to here your experience as a landlord in the next 2 or 3 months.

  • Lender · Perry Hall, MD · Member since 2015 · 100 posts · 44 votes
    10y

    Hi Maria,

    Here's a method that I use.  You will need a MRIS login to use it.  Perhaps you are friends with an Agent that will trust you with their logins.

    In the Matrix, select Baltimore City.  Status SOLD.  In Sale Date select April 2010 to April 2016.  Input the Street Name and ZIP only.  Pick the houses closest to your target and note the Advertised Subdivision. 

    Then change Criteria to only that Subdivision and select Sale Date range from April 2015-April 2016.

    Once you have all of the sales in the neighborhood for the past year, you can begin to compare square feet, age, style etc... 

    Hope it helps!

  • Silver Spring, MD · Member since 2016 · 4 posts · 0 votes
    10y

    Thanks! 

    Will keep you posted! 

  • Investor · Baltimore, MD · Member since 2014 · 1k+ posts · 688 votes
    10y

    1. value for a rental property is based off of several factors. The money you get out over the price you pay primarily, and all the factors affecting it. Factors like area, condition of house, etc. comps are good to.

    2 nope, they are all essentially the same so use anyone from a real company

    3. everything.

  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    10y

    @Maria McLemore The are many ways to evaluate properties.Comparable sales is the most common for SFH. However what a homeowner will pay for a house does not determine whether it will be a good investment. Cash flow is another way, generally more appropriate for investors.

    There are many threads here on BP about evaluating deals. There are also deal calculators under the tools tab.

    It is also important to consider your goals. Some properties will cash flow great but have little potential for appreciation. Other areas may not cash flow well but may have higher odds of appreciating. Do you want cash flow now or to grow your wealth for the long run.

    The housing stock in Baltimore is very old. The condition of the property has a tremendous affect on the value.

    How much are the rents?. You don't have to give the exact address but knowing the area can help us help you.

    My gut tells me that $30K is an OK price but no particular bargain.

  • Silver Spring, MD · Member since 2016 · 4 posts · 0 votes
    10y

    I was interested in the property for the potential cask flow.  That it why I was asking for copies of the bills in order to to evaluate the cost of maintaining the properties.  Rents are $900 per month.  Located in the western part of north Baltimore 21216.

  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    10y

    @Maria McLemore you may want to look up the 50% rule here. Basically over a portfolio of homes, over time, your expenses other than financing costs will be about 50% of the income.

  • Silver Spring, MD · Member since 2016 · 4 posts · 0 votes
    10y

    Thanks for your help!

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