Estimating rental rates

[Colby Brown]

Greetings all, in Brandon’s analysis webinar last week, he hit a point where the deal he was looking at didn’t pencil out using the rental rate suggested by Rent-O-Meter, but then he suggested that renovating the unit might allow you to increase rents, at which point the deal suddenly looked much better.  Yet there was no source for the amount by which the rent was raised—it was just a hypothetical amount based on some assumptions (and maybe Brandon’s experience).  Is this a problem that you often face, and if so what tools or methods do you currently use to estimate rental rates after rehab/renovation?

Thanks, —Colby

[Kenneth Garrett]

@Colby Brown

Use rental comps to calculate what the rent should be.  I use rentometer, Zillow, Trulia, Hot Pads, apartments.com, etc.  Compare the number of beds, baths, area, style of home, etc. This concept is the same as comparable sales for a flip.