If you want to invest in rental real estate in Lubbock then one of the first things you’ll need to do is determine the value of the property. After all, how else will you know if it’s the right investment for you? In this blog post, we’ll share with you the 3 ways to value a rental property in Lubbock so you can know right away if you should invest in a property…
When evaluating potential rental properties for your investment portfolio, the listing price is merely one aspect of the property’s true value. That’s simply what the seller believes the property is worth. As a savvy investor with Electrum Properties, you’ll want to apply these 3 ways to value a rental property in Lubbock and compare them against the asking price to determine if it aligns with your cash-flow goals and offers a win-win opportunity.
3 Ways To Value A Rental Property In Lubbock
#1. Cash Flow Potential
When evaluating a rental property’s earning potential, calculate both your gross and net monthly income to determine if you’ll achieve positive cash flow from the start. Understanding these numbers helps you make strategic investment decisions that align with your financial goals. At Electrum Properties, we recommend focusing on cash flow positive investments whenever possible, though there may be strategic scenarios where temporary negative cash flow makes sense for long-term wealth building.
Have you seen our list of cash flowing rental properties? Click here and fill out the form to check them out.
#2. After Repair Value
When partnering with a distressed homeowner, it’s essential to carefully evaluate their asking price against the property’s after-repair value. For instance, if a seller requests $75,000 for their home and you estimate the after-repair value (ARV) would be $100,000, you’ll need to calculate your renovation costs precisely. If repairs will require $25,000, there’s no margin for profit, which means you may need to negotiate a lower purchase price to create that win-win solution we always strive for at Electrum Properties. This careful assessment allows us to help homeowners regain their freedom while still making responsible investment decisions.
#3. Value To Tenant
Here’s a surprising yet critical factor when evaluating your property’s true worth – what value does it offer potential tenants? At Electrum Properties, we’ve seen investors purchase seemingly bargain-priced rental homes only to discover they’re located far from desirable amenities. Before investing, carefully assess the property’s proximity to employment centers, shopping districts, and community resources. This tenant-focused perspective helps determine not only if renters will choose your property but also how much they’re willing to pay – ultimately defining whether your investment will truly deliver the cash flow and freedom you’re seeking.
Summary
Feeling overwhelmed by all these calculations? Here’s the exciting news! You can bypass all the number-crunching and estimating by simply reaching out to us at Electrum Properties. We already manage rental properties with these figures worked out… and many are already renovated, updated, and ready for tenants (some even have renters in place).
We believe there isn’t a faster way to invest in real estate in Lubbock.