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How to find out the rental potential of an investment property

by , 22 July 2015

When investing in property to rent out, one key factor to consider before buying anything is the rental potential of the property.

If you can't achieve the rent you need to cover your costs and financing, a potential investment property may not be the right choice for you.

So how can you find out how much you're likely to achieve in rent for an investment property?

Read on to find out…


Don’t buy an investment property until you know the rental potential first


If you don’t take the time to see what you could potentially earn in rent from a tenant before you buy a property, you could make the wrong investment decision.

The rent you’ll receive as a landlord is a vital aspect to consider when investing in property. This will determine how much money you could have coming in. And it must at the very least cover your costs, such as paying the bond.

If it doesn’t, the investment property is going to cost you money. And this isn’t a situation you want to find yourself in.


How to find out the rental potential of a property


The easiest way to find out the likely rent is to phone a letting agent in the area you want to buy, posing as a potential tenant, Mark Ford in Palm Street Daily explains.

Tell them what you’re looking for. This will be the type of property you’re looking to buy. For example, a two bedroom apartment with two bathrooms in a specific area.

The letting agent will let you know the rents of properties suiting your specifications.

You can then use this information to weigh up what you could receive in rent for the property you’re interested in buying.

If there is a large shortfall between the rental income and your costs, the property is a no-go. On the other hand, if the rental income is ample, you have the opportunity to make money on your property whilst covering your costs.

So there you have it. How to find out the rental potential of an investment property.

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How to find out the rental potential of an investment property
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