How Investors Determine Fair Market Rent

Frank Chen

Hi, this is Frank Chen with REIClub.com, the only site you need as a real estate investor. Today I've got quick video on how to determine fair market rent for your rental properties.

Market Factors To Consider:

Location
Average Income of Area
Population Need – Community growth – new businesses opening (corporate)
Supply and Demand – how many rentals in your area
Neighborhood Vacancy Period

Costs to Consider When Setting Rent

Mortgage Payment
Property Tax
Homeowner Insurance – check premiums
HOA – if any
Property Management – if any
House Maintenance

Market Rent Research – Checklist

Apples to Apples – Oranges to Oranges”

Location of the property in proximity to amenities like schools, shopping & recreation
Square footage
Number of bedrooms
Number of baths
Utilities included or not?
Availability of a garage or covered parking?
Amenities included like a washer/dryer, yard, storage space, deck, fireplace?
Are pets allowed?

Online Research

craigslist
Rentometer.com
Zilpy.com
Hotpads.com
Rent.com
Hud.gov – Fair Market Rent Analysis – http://www.huduser.org/portal/dataset…
local newspaper
Look for “for rent” signs – call landlords and property managers
Ask Realtors familiar with the area
Develop an average comparable rent

Tips

Too high and your unit sits unoccupied
Too low and you've lost vital income
Determine – Do you want top dollar or less vacancy?
ot renting – lower rent compared to competition
Consider increasing rent at then end of each lease period – depends on if costs increase

Refer to Real Estate Rentals Video
http://www.youtube.com/watch?v=YEvvKs…

The purpose of a rental property is for Cash Flow. In order for it to Cash Flow, it is important you correctly price your rentals. All the information you need can be found on the internet, and the majority of the resources are free to use. It will take a bit of time to get used to at first, but after a few deals, you will be a master of your real estate market.

Again, this is Frank Chen with REIClub.com. Please take the time to leave your comments for this video below and please subscribe to our YouTube channel so you'll be automatically notified when we upload more quick video tips for you. Take care and good investing.