Is RentToRetirement accurate with rent prediction for Turnkeys?

Question

For the investors working with RTR, how satisfied are you with their rent prediction for their Turnkeys. They seem like an outstanding company but as a newbie investor I would appreciate the input of more experienced investors. Particularly,  I’m looking at Florida properties closer to Tampa. Thanks!

Scott Lundgren · Answer

@Matheu Santos

Thanks for the interest in RTR!  We always feel it is essential to verify as much information as possible in any investment you are considering as part of normal due diligence.  The only thing I would add is to be aware of who you are asking for information.  It's not uncommon for someone that wants to steer your business to them instead of working with the team you are considering by not giving fully accurate responses, or possibly try to discredit the company you are asking about.  I recommend being strategic in how you ask these questions to local managers/agents, etc.  Everyone in the industry will try to earn your business, including us.  An investor that owns properties in the same area that isn't incentivized to give you unbiased answers would be an excellent resource to get more information.  We highly encourage you to speak with other investors that are familiar with the area you are considering.  Of course, we have many investors that are investing in these areas with us & can provide input on their personal experience concerning rents, etc.  We are happy to put you in touch with them.  As you can see RTR has an exceptional reputation in general & especially on BP.  I've included some reference links below for you to proactively get in touch with other investors & read through their experiences.

Concerning rent numbers, of course there could always be some variance, but usually not significantly.  This could be rents coming in above or below the projected amount IF the home isn't already rented.  Many homes are already rented showing the actual rents.  For those that are under construction & not rented out yet, we have a very good idea what they will rent for based on working in these areas consistently.  Zillow and general online sources are not always the most accurate to predict specific neighborhoods as boots on the ground teams would be a better resource.  I would say we more often see rents coming in above vs below amounts in general.  A good example of this is in SWFL where we anticipated new construction homes to rent out for around $1,850 initially.  When the homes were completed the rent demand in the area allowed rents to actually be in the $2,300 to $2,500 range due to market conditions.  Those investors are stoked to achieve much high rents than anticipated & much higher ROI/cash flow.  Also, if there is a big discrepancy in rents, in many cases a rent gap coverage can be offered.

Ultimately, do your typical due diligence always.  Speak to the team you are working with to provide justification/verification of rents among other aspects.  Work with a team you feel confident/comfortable with & take action!

I hope this helps.  Feel free to reach out at any point in time with other questions.

To your success!

Charles Granja · Answer

I would like to clear the air here that my previous posts were made in a time of frustration, and that I was misinformed on some information I stated. I would like to retract my previous statement. I actually asked BP to remove this post, but they refused. After actually speaking with Zach at RTR, he was able to clear up things for me to assist with the resolution on the issues I was facing. Because of this, it clearly shows that he tries to do what he can to assist investors, regardless if they are investing with RTR or not. I can see that the investments made available through RTR are mainly new construction homes in good locations, which was different from my initial assumption about the homes being offered. REI is an investment that will have its challenges from time to time which can be frustrating, but that is why it's essential to work with a team that you can reach out to when in need like RTR, which is clear to me now. It's rare to come across people in the industry that actually care about your success. I hope this gives a more accurate account of the full situation.

Kristina Kuba · Answer

@Matheu Santos

Two things

Get a detailed analysis on Rentometer.com

See if a few property managers in the area will give you their opinion on the desired properties…they are the boots on the ground and can touch on showings, applications, occupancy, etc.

Seth Young · Answer

I can speak on my team and our real estate portfolio, we have seen a rental increase in 2022 that we haven't seen in the past 14 years. Typically we see 3%-4% increase yearly but we have seen an 8.5% increase for rents thus far in 2022. @Matheu Santos

Aj Parikh · Answer

From my experience, most turnkey companies promise $50-75 less on projected rent of the property. But I would check apartments.com and bigger pockets rent estimator to confirm if the rent they are projecting is what the market rent is as well. Let me know if you want to connect and I can help you out if you don’t have the bigger pockets rent estimator

Greg H. · Answer

Verify Verify verify and then verify some more.  Talk to independent agents and management companies in the area to see what types of rent they are getting

Keep in mind a turnkey company has incentive to paint you the rosiest of pictures as to sell you a property from their inventory

Taylor L. · Answer

As a general comment - it's always good practice to do a rent survey on your own and see what conclusion you come to, with any investment. Not a comment on RTR (who I have no 1st hand knowledge of), but rather on the investment business in general.

Mackaylee Beach · Answer

I'd always ask for rent comps and compare with rentometer.com and current zillow listings of comparable properties.

Charles Granja · Answer

I hope I am not too late and that you didn't use this company. Do not buy with rent-to-retirement, they do not provide any value.

No they are not accurate, many of the properties they sell are in ghetto neighborhoods. If they get the current market rate, when the unit goes vacant you will have to lower your rent to find good tenants. You can easily find a property yourself and it will be less risky than using RenttoRetirement.

Taylor L. · Answer

You're on the right track! Use several other sources in addition to Zillow. Craigslist, Apartments.com, Zumper...look around! You want to get a diverse and accurate sampling. Also look at how long units have been marketed. Don't be afraid to secret shop a few, either!

Remember that you make your money when you buy! Doing this up front work may feel tedious, but it is very important to do in order to make wise investments.

Is RentToRetirement accurate with rent prediction for Turnkeys?

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