Determining the selling price of a property these days is fairly easy, what with the ready access to online sales data from numerous sources.
But I am finding it quite a bit more challenging to determine what the market will bear regarding how much rent I can charge. This info, of course, is not part of the public record like sales data is.
Any suggestions on determining accurately how much rent a SFR property will bring in? By the way, the property in question appraised a few months back for around $850K. So it isn’t a cookie cutter type that can be comped easily.
Thank you.
I was going to say check the newspaper until I saw $850k, LOL. I would guess the market rent will be far below what your mortgage and expenses are. Also, most people that can afford that kind of monthly payment generally buy not rent. Why the desire to rent this one and not resell it?
AJ,
Rich is absolutely right! I’d sell that property. It’s a LOSER as a rental!
Mike
Assuming that you have the property leveraged (to 100%) at a hypothetical 7% in a 30 YR FXD mortgage, your principal and interest repayment alone will be in excess of 5800 a month.
You would need to adjust for operating expenses which could in turn bring your breakeven to the high 6s/low 7s (again hedging).
It sounds like a strong argument to sell.
Regards,
Scott Miller