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Posted over 7 years ago

Your realtor is wrong. A short case study.

I invest out of state, so I have to rely on my team.  They have good intentions, but they also have a motivation to close every deal they can. They might omit or forget. If they don't work for you, they may be not follow the same processes you do.

We had a MLS property meet initial criteria. A 2/2.5, 1200 sqft Townhome, built in 1997, in a C+ part of town. My agent told me 1100/mo, and that it will rent QUICKLY.  I like quickly... She sent me rent comps on 4 properties ranging from 1095 to 1175.

We offered on it... DECLINED!  As always, followup was key.  2 months and 5 offers later, seller accepted. Time for due dilligence.

My PM company's acquisitions manager said it could probably rent for 1000, maybe 950 if I wanted fast. Ruh roh.

My actual PM, after a walk through, said two units in same complex were rented for 895 and 850.

So what's the deal?? This property was nice and new, but had low rents...

I dug in. The comps she sent were newer and much nicer than my unit. Beautiful curb appeal with spacious driveways.  They were larger, and they were adjacent to nicer newer single family homes in a better part of town.  This property was next to a large (but nicely kept) mobile home park 1 block away. The road in included tight, single lane in and outs adjacent to small driveways.  And there were awkward cramped angles.  If the property to the left parked a large truck in the driveway, it would block the entrance to this one.  Just a very cramped entry and setup that every potential tenant would experience, and undermine the actual quality of the property.

We backed out, the seller wasn't tenable to my requested 25k drop in price. I sent some notes to my agent on how I do my rent comp analysis. Onto the next one!



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