3 Ways to evaluate the worth of a Rental Property in Lima Ohio
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1. Cash Flow Potential
What is the potential income you’ll make each and every month from this rental property? Consider both gross and net so you can more easily calculate whether you’ll be cash flow positive right away. Ideally, you’ll want to be cash flow positive (although there might be a strategic reason to temporarily not be cash flow positive).
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2. After Repair Value
When working with a distressed seller, you’ll want to weigh their asking price against the value of the house after all repairs are made. As an example, a seller might be asking $75,000 for a house and you know the after-repair value (ARV) would be $100,000. So, you need to figure out how much it will cost you to make repairs. If it will cost you $25,000 to make repairs then there’s no profit for you, you so might need to counter-offer to a lower price.
3. Value to Tenant
This is a surprising and often overlooked way to value your property – what is the value of the property to a tenant? If you buy a low-priced rental property but then learn that it’s far away from anywhere that a tenant wants to live, the property might not be a good investment. So, look at the location of the property in proximity to work, shopping, etc., to help you determine whether a tenant will want to stay in your property and how much they’ll pay.
To sum it up, If all this seems complex to you, you can actually skip all the calculations and estimates and just talk to CORI LLC’s Realtor at 614-961-0169. We have rental properties with a lot of these numbers already crunched … plus many of them are already cleaned up, fixed up, and ready to rent (some are even rented).