Hello All,
I am a newbie to the PI game and am researching a property in an area that I do not know too much about. I have managed to find the easy information without too much trouble but I’m stuck with the question “is this area really a viable rental location?”
Is asking the local agent for his/her opinion the only option? Is there some alternative mentod(s) of working this out? Some outside, unbiased way perhaps.Your feedback would be much appreciated.
Thanks in advance.
Lizzie
Hi Lizzie,
I was doing the same thing this weekend just past.
The way I did it was I went to real estate agents and asked them two questions. They were “How many rental properties do you manage?” and “Can I please grab a copy of your current rental list” (The please is very important)
What I was able to see from this information was the types of properties which rent well in the area. Older 1br and 2br units rented very poorly because there were 20 of them on the rental list, and the rental manager only looked after about 40 or so units all up.
But, it looked like 3br properties rented well – there were 6 or so on the rental list, four of them were becoming vacant in the next month, two were recently vacated.Something else you might think of doing is chatting to the locals. Start a conversation with someone, explain what you’re doing, ask if they’re renting or whether they own in the area, and chat to them about their experiences in finding a home.
I was chatting to two ladies for nearly two hours on saturday, about everything from the town industry, to which agents are the best, to property prices, to renting in the area – even which areas they wouldn’t walk through at night.
I’m usually notoriously good at finding information, but I have a process which I follow. I ask myself what information I’m looking for, then I list down all the places which might have this information. I keep going through the list until I find what I need.
Good luck with the hunt
Brent
Thank you so much for such a helpful & prompt response Brent.
When you said to ask for a rental listing I thought to myself “of course, how could I have not thought of that?” Sometimes it just helps to hear these things from others before it really sinks in.
The obvious way is to ask the agent but you can’t be sure that you’re going to get a true & accurate picture.Talking to the locals is a fantastic idea and it sounds like you have a real knack for it. I guess that is a skill that comes from lots of practice. My only dilema is that the town I’m looking at is about a 4-5 hour drive from where I live. Talking to the locals might not be so easy.
The deal itself sounds almost too good to be true, and it just might be. See what you think?
It’s a 3br wb house up for auction and the agent is expecting to get between $20,000 – $35,000! She estimated that the rent could be $80 -90 per week but has referred me to the local agent who handles rentals to get a better idea. As of yet I haven’t been able to get on to him directly but am hoping to hear from him today.
Apparently he handles 50-80 properties, but we are talking about a town with a population of 3,000.
The house itself needs a little work but basically looks in pretty good nick, especially considering the price.What do you think of this scenario?
Too risky for a newbie? It really all hinges on the rental market in the area, doesn’t it?Thank you once again and if you have any more words of wisdom for me please don’t hesitate to share.
Lizzie
Thanks Michael. Rental waiting list, another good idea.
This might sound stupid but where would you start at this point, to source potential tenants – keeping in mind that I’m a newbie (with no idea).
Would you get information from the local agent about who’s on the waiting list and contact them?Lizzie
Where is this property? In what state? I live on the Sunshine Coast and there is not anything around here or 3 hrs north or south of here for that price! I didn’t think they still existed?
You could also pretend you are looking for a 3 bedr. house in the area and what is available at what rental.
in my invest. area, Melb. outer east, my rental managers tell me that 2 bedr.units don’t rent easily, there is rather a large supply available.Hi,
This may be a very brooooad generalisation, but I have found the country real estate agents a pleasure to deal with – what they said was correct if not conservative as far as rentals.In fact I rented out for $5 more than they were quoting (so they were not exagerating). Please correct me if I am wrong.
Regards
CookieHi,
I finally got onto the local rental manager who was, as Cookie says, a pleasure. I have established that this particular property would not be a good one to purchase as a rental for various reasons. However I discovered that there are properties closer to the town centre that are much more desirable for tenants yet still at a great price.
Long story short he has my details and understands where I’m coming from and what I’m interested in and said he’ll give me a call if any thing comes up. Good result, even if not a purchase.Lizzie
Hi Lizzie
Dont always take what an agent tells you at face value. Even though he may sound very nice he may have an ulterior motive. Pass the reasons by the forum and I’m sure they will come up with creative ideas to make the purchase of your property worthwhile. e.g. it may not be a good renter but you may be able to renovate & sell to help springboard you onto a better property
Good LuckHi Lizzie,
The town only has 3000 people? Be careful. Not a lot of people to ensure constant rental. Because its so cheap you can probably get away with it for a while but is still lost income.
What does the town offer? Why do people live there. Is it an ageing population or is there some local industry?
These are the questions I would be asking. I’ve seen some pretty cheap potential IP’s like the one you are talking about in rural Victoria but sometimes there is a reason why they are so cheap.
Because most people are used to seeing properties selling for $100 000+ they are really overjoyed when a cheap property like that comes up. But don’t be duped. These places are usually in the middle of nowhere going nowhere either. Don’t let the cheap price fool you.
My 2c worth.
Thanks.Hi,
I take everything you guys have said on board and I’ll tell you the reasons why I decided this would not be such a good deal.
Although the agent could have a motive for telling me all this I still think it was valuable information. The property’s located on the edge of town in a housing commission area with a 5 min drive to get a litre of milk. It has been vacant for 18 months and the agent said it will go for $35,000 but would need at least $10,000 spent in renovations. Even then you would only get $80pw rent, that’s if you can get someone to rent it at all.
The agent suggested a house in the town centre would be a better investment. They can sell from $40,000 – $60,000 with a rental return of $100+pw.
I guess you need to weight up the situation for yourself. Keep in mind that this is a small rural town of only 3,000 population.
Any opinions?
Lizzie
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