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What’s the best way to financially evaluate residential investment property?

Also any software you might use for this.

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One Response to “What’s the best way to financially evaluate residential investment property?”

  1. Be more specific. Are you evaluating apartment complexes? Duplexes? Single family homes?

    There is no software I know of for single family but a rule of thumb is 10% of the market value is the expected rental value. Lower priced housing (as near or under $100K as possible) is better rental potential property than a more expensive home. I personally shun single family investments (unless I can buy a distressed unit, rehab it inexpensively and then sell it), as residential tenants seem to have all the rights today and it is more difficult to evict bad tenants.

    Apartment units are a little easier with a 5 yr history to evaluate, absent the 5 yrs a good commercial real estate broker can evaluate using either way and assist with the purchase. Use one who does investment grade property and is a member of the CCIM or holds the CCIM designation as they have the training to properly evaluate properties and advise if the subject property will meet your investment requirements. A CCIM or candidate will have access to software for the evaluation but it needs knowledgeable persons inputting the correct info to be accurate. They can do cash of cash or straight up returns or several different evaluations to suit your particular investment objectives.

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