When you are considering buying a rental property either with renters in place or buying a property to place renters into, you should make sure you have a firm understanding of current rental market. If you see that there are a lot of concessions and incentives being offered, it should be an indicator that the vacancy rate might be high and the rental amounts a bit lower than they were.
I recommend calling around to your competition and getting a feel for what your competition is currently offering their tenants and how many units they have available. I normally make sure I am comparing apples to apples. Call on properties with similar number of beds and baths and square feet. The age of the property, ammentities offered, and location can all be additional factors to consider when choosing your comparable properties. By calling your competition, it will give you a good idea of what is really going on in that rental market. You should gather the information from at least 5 different properties.
Ask them these questions:
Tell me about your property for rent!
Do you have any move in specials? If so what are they?
What ammenities are included with rent? Cable, internet, spa, garage, gym?
What is the monthly rent and what does that include?
What is the security deposit amount?
Do you allow pets? What is the pet deposit amount?
Has the unit been updated recently?
What are the terms of the contract? month to month, six months, one year???
How many units do you have available?
Once you have this information from at least 5 properties, you should see some sort of trend, if all of the proeprties are similar to your property.
Also, I join local landlord associations and property management clubs in the area, so I can get the inside scoop on what is going on in the local rental market. The added benefit of being a member of these clubs is that you often will have access to their "deadbeat renter list". That in itself is worth the money to join.
Be thorough and be effective, so you can beat the competition.
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125