My client wants to purchase a condo for $155,000 and rent it out. What should be the monthly rent?

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Sep 25, 2022 5,726 Answer a Question

I looked at other properties in the area and the past history on this condo, but what is the best way to determine this price? He asked for advice.

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REALTORS®
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Realtor Only
Bo Liu
About 2 months ago
It is a hard question to answer. It could include many factors. Location, market demand are the important ones. If you have something in mind for example, the location and the neighborhood, I will be happy to check for you on the rental price. Or you can run a CMA by yourself.
Penny Clissold
About 2 months ago
Go to har and do a search for “ rentals- then go to solds” in that complex. That will give you an idea of what the same unit has been renting for. Then spread out and do the same thing by zip code. If the listing is nicer than the ones showing up go up 100 bucks. If not go down a little. Good luck!
Angela Chaney
About 2 months ago
There are many variables to consider with this question. Do these condos allow you to rent them out per the bylaws? Is he financing the condo? What are the monthly HOA dues? You will want to make sure his monthly payment is covered by the rent. But, if you charge more than what the market value is, it could just sit there. You will need to do a CMA on that complex to find out what rentals are renting for if they allow rentals. Then if the client is financing, you want to double check the estimate of the amount he would be paying monthly with a mortgage calculator (you can download one in the app store of your phone, don't forget to add the monthly HOA dues). This will help you to determine if his note would be covered by the rent.
Rachel Moore
About 2 months ago
Here’s a rental property calculator. This might help you and your client figure out what works for them. https://www.calculator.net/rental-property-calculator.html
Gabriela DeLaTorre
About 2 months ago
Great answers. It will all depend on the comparable rents in the area, condition and characteristics of the property, location in the community, homeowner's association fee, parking spaces. As a very general ballpark figure .80 to 1.20 per sf.
Joe Applewhite
About 2 months ago
Generally you want a 1% ratio or it’s not the best purchase. So $1550 or higher. But how much is the HOA? HOA can kill your profit margin. Better off buying a townhouse
Rebecca Robinson
About 2 months ago
I would do a CMA for similar properties that have been rented in the past 6 months and go from there. The rental market is still very HOT with the interest rates being on the rise.
Yvonne Chauvin
About 2 months ago
You can only determine the estimated monthly rent based on similar properties in the same condo complex, that have rented recently (ideally, past 6 months). I would also recommend you help your client determine a potential cash flow, so they know if they’re making the right investment.
Catina Thomas
About 2 months ago
You can use recent lease prices in the area and current market that compare to the subject property in the MLS and you can also use the rent calculator here to determine price: https://www.calculator.net/rental-property-calculator.html Hope this was helpful.
Alpana Romana
About 2 months ago
Its about how much rent around that area, subdivision, how many days on market and same time how fast your clients like to rent and CMA .So give it to all information and market analysis to your clients and give your Best opinion and let him or her decide.
Anne Cummins
About 2 months ago
Beyond HOA, Taxes & Insurance, be sure to set aside an amount for ongoing maintenance. This is a good time and rentals prices are up. Good luck.
Terry Kirksey
About 2 months ago
Har question to answer...need to know the area where the unit is located and the condition inside and out of the condo. Does the condo pay for the water and the insurance or is it out of your pocket?
Lisa Cabral
About 2 months ago
I recommend to look over the current condo comps in the area they are planning to purchase. Once, your client reviews the comps discuss with them the possible monthly rent they can receive. Then ask them if they think they are getting the return on investment they are looking for on that purchase.
Kiriaki Koymarianos
About 2 months ago
This question can have multiple answers. Will your client have a mortgage? What will the amount be? What will his insurance and taxes be? What will the monthly HAO dues be? After you answer all these questions you need to talk to your client and determine if they still want to purchase the property and rent it out
Tracie Benton
About 1 month ago
You would need to consider several things before providing him with a rental amount. Market area, location, CMA and what your client wants to profit from the rental property. I hope this helps
Disclaimer: Answers provided are just opinions and should not be accepted as advice.
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