Quote:
Originally Posted by TiltonBB
I am not sure if you have any actual experience owning rental properties but I would tell you that is just not correct.
The tenant couldn't care less what your expenses are, or have any interest in helping you to make a profit. Tenants will stay as long as they think they have a good deal and like where they live. As soon as you raise the rent to cover YOUR expenses, if it does not reflect fair market value, they will move along. From a tenant perspective your costs of ownership and maintenance mean nothing.
For the last 42 years I have followed the rental market closely to establish fair rents. I have reviewed numerous ads both in print media and on many websites to determine the market value of a property and determine what amount I could charge. That determination is what works in the real world, not what my expenses are.
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I absolutely agree. Tenants could care less about your expenses and expenses never determine rental charges. They are strictly what the market will dictate.
Before purchasing the buyer needs to do his due diligence and investigate market rates and his expenses to determine if the property will yield the desired cap rate for the property.
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