Peeps that own Real Estate

[onebigab]

I am currently looking for a multi-family house to buy and rent out. Preferably a 2-3 family to start out with.

My question here is: How do you figure out what the property is worth?
One formula I was told about is: rent roll for year X 6-8yrs should give you the value of property.
Also how do you figure out what percentage of increase in value of said property over a period of time.


Lets say a 2 family bought for $166,000 back in '02 is now on the market 2 yrs later asking $260,000.

Mind you nothing major done to it in the last 2 yrs to call for an increase like this.

 

[coverguy]

all about location.

to see if a house is worth the asking price, try this:
first thing you need to do is analyze the asking price. from this total, figure out your mortgage rate. take into effect any work you would want to complete before renting and add this amount to 5 years of your mortgage rate. then add another $3,000-$5,000 for possible legal expenses. find out (from real estate agent) the avg. price per square foot in this area. based on this price/sq. foot assume your rental price. multiply this out by 5 years. compare the two 5 year values. if you see an adequate enough profit to cancel out your time and work then you're set.

just my personal formula, and i'm not a pro, but i looked into the same thing in the past year or two. best of luck.

 

[gymrat]

"landlord" us a cool title.

 

[SC4EVA]

"landlord" us a cool title.

What area?

 

[onebigab]

What area?

New York

 

[onebigab]

all about location.

to see if a house is worth the asking price, try this:
first thing you need to do is analyze the asking price. from this total, figure out your mortgage rate. take into effect any work you would want to complete before renting and add this amount to 5 years of your mortgage rate. then add another $3,000-$5,000 for possible legal expenses. find out (from real estate agent) the avg. price per square foot in this area. based on this price/sq. foot assume your rental price. multiply this out by 5 years. compare the two 5 year values. if you see an adequate enough profit to cancel out your time and work then you're set.

just my personal formula, and i'm not a pro, but i looked into the same thing in the past year or two. best of luck.

This isn't going to be in a decent area. I'm not living there. I just want to start out small for myself.

I'm also not looking to be a slumlord either.

Either way it still is a moneymaker. I'm just not so sure on wether the house is worth a $100,000 increase in 2 years.

 

[coverguy]

i would get it appraised. it might have been bought below market value and now being listed slightly above. normally, other than major improvements, the only things that could effect price like that is the location increases in value or there are new transportation methods available.

 

[boyer]

You don't necessarily have to get an appraisal. Call an appraiser and ask him what he might be able to appraise the propery for. Call a few realtors in the area and ask them about the property. You can also check the county website for the tax accesed value. The market value should be about 15% higher.

 

[BO-DEN]

all about location.

BD