3 Ways to Value A Rental Property


Are you planning to invest in a rental property? Whether it is a condo, multi or single family home, how would you know if it's going to be a good investment?

Here are a few ways to determine if the property will be a good investment or not.
Is the selling price competitive in the market?

How's the comparative market analysis of the rental property? Will there be repairs needed or it is move-in ready? Is it reasonably priced?

It is important to compare the property to other properties with similar characteristics that were sold recently. This can help you determine if the property is over-priced or relatively cheap. If it’s cheap, you have to research more because it may be priced low for a reason.

Your local realtor can greatly help you with this.

How much will be the potential rent price?

Do an analysis for its potential performance. Determine the average market rate rent by checking comparables from different rental websites online. Be sure to compare it to similar homes within the same neighborhood.

Take note not just the bed/bath count and size but most especially the property condition and age because this can determine the maintenance costs you will need for the property. It is also vital to consider the location of the property. Is it a place where many would like to look for a rental or a relatively remote area? This will have a big impact with your potential income.

Get all the notable things you can find to have a good reliable and realistic data.

How much will be the ROI?

Be sure to calculate the real ROI not just what you want it to be. You can estimate the potential rent for the year less the estimated annual expenses and mortgage if it’s not cash. Will there be any income? Also, consider the property value’s appreciation or depreciation potential.

How much and when will you possibly get your earnings from this investment? Will there be any risks and how will they impact your ROI?

Will you be satisfied with the potential ROI you calculated?

If you really are interested in investing in real estate, it is important to look at all these components before making your decision. It is vital to find a property that can yield you a favorable amount of income so you can enjoy your investment.


If you would like to learn more on investing in real estate and would like to look for a property to buy especially around Alaska, call us 907 570-6757 or 907-720-4663. We can help you find your dream rental home investment.

Comments

Post a Comment

Popular posts from this blog

Alaska Real Estate Market Update as of December 8th to December 14th 2018

Image
Here's Alaska real estate market update as of December 8th to December 14th 2018. Still, on the top of our list is the  Anchorage market . During this week, 489 are currently active listings where 11 of which are new listings. 22 listings were pended and 36 were sold. Next is  Wasilla market , 369 are active where 22 are of which are new, 19 pended and 16 were sold. Compared to the  previous market update , you can see that there are less active and pended then more sold listings in Anchorage while more pended and same were sold listings in Wasilla for the week. See full report: If you want to know more on the latest real estate market update and is interested in buying or selling, give me a call (907) 570-6757 or 907-720-4663.
Read more

Before You Renovate or Buy a New Home, Read This Post

Image
Most people at some point reach a real estate crossroad whether to renovate your existing home or buy a new one that will fit your current and future needs. To answer the question, you'll have to think of many factors. This is not a one-size fit all answer but answering the following questions may help you make the decision. 1. What can you afford? Extensive and realistic budget planning is an essential factor to make your decision. You need to know the renovating vs. buying costs. Is it cheaper to buy than to renovate your home? Whether one is cheaper or not, will it fit your budget? And if you do have the budget, will it be worth it? 2. Will there be enough space? One of the common reason people need to move or renovate is the need for expansion. Will there be enough space for you to expand if you are going to renovate? How about adding a 2nd story? You need to know if the home's foundation can support additional weight or it will require reinforcement. Also, is
Read more

Your 2024 Guide to Buying, Selling, and Market Trends

Image
As we usher in 2024, it's time to demystify the real estate market for everyone, whether you're buying, selling, or just curious about what the new year has in store. This guide is crafted to give you all the essentials, packaged in a simple and easy-to-understand format. 1. 2023 in Review: A Quick Recap of the Real Estate Market Housing Prices: Last year saw a steady rise in housing prices in many areas, although there were regional variations. Interest Rates: Interest rates fluctuated, impacting mortgage rates and affecting both buyers and sellers. Market Demand: The market witnessed a high demand in suburban and rural areas, a trend that emerged during the pandemic. 2. Buying a Home in 2024: Strategies for Success For First-Time Buyers: Start by getting pre-approved for a mortgage to understand your budget. Look for areas with growth potential but lower prices. Shopping Smart: Research neighborhoods for future development plans. Inspect properties thoroughly and conside
Read more