All Forum Posts by: Michael Archard

Thanks, Mike. Great way of looking at it. 

Thanks Gavin. I like your strategy to start high and work down from there. 

Hi BP,

I have a B+ class 2bed/2bath condo that I'm preparing to list for rent. The market rent without utilities is about $2,100 which I have verified with local agents and property managers. The condo is in a midrise building with the $525 HOA covering all utilities (unmetered), amenities (pool, gym, game room, etc), parking, snow removal, security, master insurance. My goal is to get at least $2,300 per month.

I have been told by an agent to price it at $2,300/month with everything included. I have been told by another agent to price it at the market value of $2,100 with a flat rate of $200 for utilities/amenities. I have even been told by a local real estate investor to drop the rent to $1,775 and have the renter cover the full $525 HOA value.

Has anyone had luck with one particular approach? I am leaning towards the $2,300/month option but do not want to miss potential quality applicants that might be using strict price filters while they search. 

 Thanks in advance! 

@Joe Splitrock

Thank you for the response. I agree that it limits risk to have a third party involved. I plan to first try a quick estimate CSS for my smaller single family which was just cut renovated, which is small by sf (worth about $400k). My goal is to use the accelerated depreciation to offset some of the profits from my next flips.

In your experience did you find any companies that can do a quick engineering-based study? I’d want an asset breakdown but don’t necessarily need a full blown study.

@Michael Plaks Thank you very much. This is excellent advice. 

@Daniel Dietz thank you very much! This does sound like a good option to limit risk without having to spend thousands on a full CSS.

@Mike S. Thank you for you thoughts. I am interested in learning the process now and applying to future deals as I expand my business. One cost seg company told me the process is not difficult or time consuming for a single family or small multifamily. If I can learn and get to complete a report in a day or so, it would be well worth the few thousand dollars saved in my opinion. I have a few samples to go by as a decent starting point. Plus I’m not afraid to learn something new even if it’s tricky at first.

It sounds like you have some intimate knowledge with cost seg studies and IRS audits, can you please elaborate as to your experience or background? Most of my knowledge on this matter has been gained from accountants with experience in commercial real estate. It has been difficult to find someone doing these with smaller residential.

Thanks so much!

I have been thinking about self-performing a cost segregation study to tap into accelerated depreciation on one of my smaller rental properties. I have seen companies offering the service for a few thousand dollars. Has anyone done one themselves? I know the IRS guidelines require a competent person with an engineering or appraising background. I am a civil engineer PE with a background in real estate, construction, finance and estimating.

@Charlie MacPherson thank you this is a great way of looking at it.

Thanks @Jennifer Wilson! Holding the services provided equal, I was told a higher commission could bring my listing "to the top of the pile" in a situation where there were many listings in a competitive space. Either way I agree with your thoughts related to keeping a buyer's best interests in mind. Thanks again.