Hi everyone,
My friend has a duplex in Seattle, Washington, It is appraised at $250,000(2003). The mortgage is $1,400 a month. They remodeled the duplex. How would you figure out the monthly rental fee for the duplex?
Find out what similar homes are going for in the area. Look in the newspaper and call the landlords to see what they are charging. Drive the neighborhood and note “For Rent” signs and call on them, too. Regardless of what was paid for it, the appraised value, or what remodelling was done, you probably can’t get too much higher than market rent.
Sounds like a great idea Kimdrake. Ill do it this weekend. I’ll keep you up to date and see how it goes.
well I check around the neiborhood of the rental duplex. And they all came down to a similar fee. $750-800.i will possibly do $770 because I did some remodeling to the duplex. Next step is to post the “For Rent” signs. Any suggestions in how to market the duplex?
Sign in the yard or window works best for us, as most of our tenants come from the same neighborhood, or they have a friend in the area. You could also do an ad in the paper and/or work with a rental service company.
Do you know how you are going to screen the tenants, how much to look for in income, how much for the application fee, who’s doing credit check, etc? I think the biggest cause of problems for landlords results from not screening appropriately!
One other thing: you stated in an earlier post that your mortgage is $1400/month. If both sides rent at $770, you could be in in a negative monthly cashflow situation, especially if taxes and insurance are not escrowed into that monthly payment. Have you calucated your costs?
Do you know how you are going to screen the tenants, how much to look for in income, how much for the application fee, who's doing credit check, etc?
I was planning on asking them for there pay stubs. And atleast 3 times the amount. But the application fee, im not familiar with it. Could you tell me more about it? Would it be a good idea to have one? And if so, is it a form I can get online? I want to do credit checks also, but what kind of steps would i need take? Is there a company that does that?
One other thing: you stated in an earlier post that your mortgage is $1400/month. If both sides rent at $770, you could be in in a negative monthly cashflow situation, especially if taxes and insurance are not escrowed into that monthly payment. Have you calucated your costs?
Yes, I believe I am in a negative monthly cashflow. Would it be a good idea to higher the rent alittle more? And if so, how much higher should I rent out? How much positive cash flow should I have?
Pay stubs are a good start, and 3 times a months rent is a good rule of thumb. I also ask for a copy of driver’s license and social security card, proof of any other income (child support, disability payment, etc.), contact info for employer and previous landlord(s), pet info, vehicle info, emergency contact… I’ve probably forgotten a few items. With the correct verbage and by signing the application form the applicant gives you permission to run their credit.
The application fee depends on how much it costs you to run the credit. There are companies who can do this for you, or you can set up your own account to do it yourself. You might contact a REIA in your area for a reference for a company that does tenant checks. Sometimes the REIA has application forms you can purchase.
You should rent the duplexes out for as much as you can! Cash flow as much as you can! But as I stated earlier, how much that is depends on what the rental market is like in your area. If you ask for a certian amount and there are no takers, you can certianly lower the amount.
Make sure you are familiar with the rental laws in your state, and that your lease adequately reflects those laws. For example, how much security deposit are you allowed to collect… What is the limit you can collect in late fees, proper notification, the eviction process, etc.
Since it sounds like you are new at this, you might want to take a look at a “landlording” course. Don Beck has a good one, so does Mr. Landlord, Jeffrey Taylor. You might also seek out seasoned landlords at your local REIAs. They seem to love to share horror stories, and you can learn a lot from their mistakes!
Hi Kimdrake,
I will do that. thanks for the great advice. Any suggestions to where I can find the rental laws?