Investors often mistake detailed online research as the equivalent to boots on the ground. Not in my experience, that’s for sure. Here’s how to do a rent survey, at least the way I do.

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Transcript:   Everybody talks about knowing the rents in the market in which you’re in. How to do that though has become far too easy as far as I’m concerned. We just go to the computer. You open up the laptop or the desktop and you start doing your research and you find all kinds of examples that are maybe even close to what you’re looking to buy, or maybe you’ve got a vacancy or two that happened at the same time in something you own and you’re really trying to figure out, you keep hearing everything going up so what should I ask? That’s okay. That will establish the bar for you. Don’t believe it. The first thing you want to do is get on the phone. You want to call any owners that you happen to know in the area. If you’ve invested out of the area you probably don’t know anybody. But if you’re local, ask them, find out. Then the next thing you do is get your handy dandy clipboard, your legal pad, and a pen. Put on your running shoes and start knocking on doors. Go to the exact neighborhood where your place is and go to the rentals. Go to the manager if they have one. No tomfoolery, no “I’m going to college and I’m writing a paper.” Say look it, I run some apartments here, or I have a rental over here. I’m just trying to figure out what I should charge for rent. What do I have to pay here? Nine times out of ten or more they’ll tell you. You want to start writing everything they tell you down. Sometimes you luck out and you get to be shown a place. You’ll find out that yeah, they might get more rent than you but you find out that the reason is your people are paying for trash and theirs aren’t, and they get a little bit more rent because of that. There’s all kinds of reasons the owner of that duplex might be paying for both tenants’ hot water. That adds up. There’s just a lot of reasons, so you want to find out all of the little details. You want to knock on all the doors. You want to go to local property management firms. You want to say look it, here’s what I have found today. Share your information. Usually you’re not going to tell them anything they don’t know, but you never know. They’ll at least appreciate the offer. They might be able to tell you. Of course they’re going to try to recruit you, and maybe you’ll say okay because you’re tired of doing it. The bottom line is if you’re nice and they’re feeling generous that day, do it to two or three management companies and you’ll be surprised at how easily they might share information. You want to find out what expenses you have that your competition does not have, and vice versa. That, like I said, factors in big time. You want to find out changes you might be able to make. For instance, you might have a duplex that has one meter for water. Is it prohibitive, or affordable, to have it re-plumbed from the street so that you have separate meters? That will usually amortize itself more quickly than you think. The people are used to the rent. When you get new ones in there, now you’ve raised your net operating income. Same thing with water heaters. Maybe instead of having one water heater you get two and you have the plumber come in and do that. There’s all kinds of things you can do, but you don’t know to do it until you know what you’re competition is doing. Get that clipboard and find out. You can’t change things for the better until you know what needs to be changed.