OfflineAbout 2 years ago I bought a small 2 bedroom house that needed some cosmetic work in a small town about 30 minutes from the nearest metro area. This little town has 3700 people living in it. When I bought this house I paid $26,000 for it and I asked my real estate agent what she thought it would rent for. She said "you should be able to get $325-$350 for it". I trusted her opinion because she owns several rentals in that town. This house sat on the market for a year with no offers. It just seemed so cheap to me and it looked like a solid house. So I put in my offer, it was accepted, and 3 weeks later the house was ready to rent. My real estate agent liked what we had done to the house and she asked what I was going to rent it for. I told her that I was going to ask $515 per month for the house. She said "there isn't a single 3 bedroom house in this town that rents for over $500 per month let alone a small 2 bedroom. Another invester who considered buying the house stopped by during the rehab and asked how much I thought I was going to rent it for and I said "over $500" and he said "it will never happen". I knew this town was growing. I was seeing all the signs. I thought I could pull over $500 for rent. So rather than listen to everyone else I put my ad in the paper. The phone rang hard and heavy. It took one full day to get $515 per month for rent and I started wondering if I should have asked for more! All the other investors in town just shook their heads and said that I got lucky. Just to prove them wrong I bought 13 other properties in this small town within the next 14 months and they all rented in a heartbeat for top of the market rent. The point of the story is this, don't listen to what everyone else says. Put an ad in the paper even before you buy a house and get a feel for what the market wants. Once you know you can begin to put offers in accordingly. Now I own enough properties in this town that I control the rental rates. Oh by way, all the other investors have followed suit and raised their rents and now my rental rates are average again which has me thinking.....
You've got to find your obstacles and call them out! Unsheath the sword, and do battle with whatever it is that holds you back!
You just continue to impress me brother with your knowledge on being a REI. I am just 3 months in to the course and my coaching program, but I know when the time is right I will leap on a deal like a hungry wolf. Please continue to post, I enjoy reading what you have to offer and possibly someday you might ask me for advise...Jan
CBR thats a great post. I'm starting to smell my first deal. One of the things that I have been pondering is just how much to charge for rent.
When you run an add before you purchase a house are you giving them your phone number? Or is it an anonymous post?
Listening to others that try to tell you NOT to do whatever it is you are pushing the limits for will only keep YOU where THEY are.
Great example to share and THANKS for sharing it!
Mike
"Make it an AWESOME day! (Who else is going to do it for you?)" - Mike Spillman
"As long as there is breath there is hope!" - Mike Spillman
I don't give them my number. You can do 2 things. Set up the 800 number Deans sells which I do or get a second cell phone line to send them to if you need a local number and send them to voice mail which also regulates your calls.
You've got to find your obstacles and call them out! Unsheath the sword, and do battle with whatever it is that holds you back!
I want to add that my thoughts that the town was going was correct. Today I could sell that house for $65,000 in a heartbeat. Keep in mind I did force some of the appreciation during the 3 week rehab. I had SOMEONE ELSE paint the inside and outside and put in new carpet. Pretty complex stuff. HA!
You've got to find your obstacles and call them out! Unsheath the sword, and do battle with whatever it is that holds you back!
Amazing CBR, It just goes to show you to follow your gut sometimes and not listen to what everyone else says. A big "I told ya so" is in order I think haha.
The foolish man seeks happiness in the distance, the wise grows it under his feet.
I'm experiencing the same thing here. I live in a samll town in northern Louisiana with the population of 5,000 people. The average rent is 300-400, and my neighbor place an add to rent his house for $600.00. Everyone thought he was crazy or he was on crack, but after three weeks of advertising, his house now rented for $600.00. He bought a another home a few block from this house and now making about $200-$300 cash flow. It tells you something that you can't always go with the flow, but you have to do it a little different. It also tell my that if you don't ask for it, you will never get it. This guy asked $600 to rent his house and he now got it.
Someone stopped by last week and asked me if i was renting my house. I told her no, but if she was interesting, i can make arrangement. She's willing to pay $575.00 for my house with 3 bedroom and 1 and half bath, but my neighbor's house in only a two bedromm with one bath. If i was to rented it out my house for $575.00 per month, i would have a cash flow of $175.00 since my payment is only $400.00 Now, i gotta get another house and get this one rent it out. She said she has two month left on her lease and she will not renew it because there's too many problems. Once again, great info CBR.