How To Value A Rental Property

11 Dec

Posted By: Sean Terry | December 12, 2008

Get The Inside Scoop On Valuing a Rental Property In This Market

Mba0368lCrunching numbers and determining the market value of a rental property is the MOST crucial step to insure success.  Have you ever heard the saying “you make money in real estate when you buy, not sell”.  Well, it’s true!

How we determine the value of a property is buy following these 4 simple steps.

Step #1

Get a CMA (Comparative Market Analysis) on the subject property, the search should have these filters.

A. Properties that have CLOSED within the subdivision in the last 90 days.

B. Must have 4 CLOSED comps that are “arms length”(can not be bank owned sale or trustee sale)

C. If no comps are within the subdivision start opening the search by 1/2 mile increments until B. is reached.

D. Search area must have LOW(under 10 of the combined) bank owned properties and pending forclosure.

C. Must check to see if the Active Listings are in line with the Closed Sales.

Step # 2

Determine condition of the 4 CLOSED comps to see what is expected to reach that value.  It is good if the properties are not in good condition because you can make your house one of the nicest with in reason and match or beat the comparable.

Step # 3

Drive or look at the property and determine what repairs are needed.

Step # 4

Make the correct offer… I will do another post on What Price To Offer or Bid.

If you would like to learn more check us out at www.FortressInvestor.com

Happy Investing

Tags: How+To+Value+A+Rental+Property, How+To+Value+A+House, Valueing+A+Rental+Property
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3 Responses to “How To Value A Rental Property”

  1. guide 28. Dec, 2008 at 5:54 pm #

    Hallo thank you for a lovely web site I enjoyed

  2. garmin nuvi 255 26. Jul, 2011 at 4:33 pm #

    Thanks i love your article about How To Value A Rental Property | Dealmakers Blog – Ramblings of a Real Estate Mogul

Trackbacks/Pingbacks

  1. 10 Tips For Buying Bank Owned Property & Getting a Smokin Deal | Buy Bank Property - 24. May, 2011

    [...] 1. Determine the value of the property, I wrote a post on this subject and you can read it here. [...]