Rental Income Properties

Introducing a new search feature of MLS Deal Finder - Rental Index. With Rental Index, we can now search the market for Properties that can generate a positive cash flow. Rental Index is a perfect way to search for properties for the buy-and-hold strategy.

Rental Income properties

The 1% Rule

Purchasing a rental property for investment requires a thorough analysis of future rental income compared to the cost of owning that property. In general, property owners would want to create a cash flow greater than the costs.

For example, let's say an investor is looking to purchase a home priced at $150,000, with the goal of renting the home out for income. If the investor places $0 down payment, then he needs to borrow $150,000. The one percent rule says that the home would have to be rented for no less than $1,500 per month ($150,000 * 1%) to be a good income property.

Rental Index

 

Similar to the 1% rule, Rental Index allows us to search for good rental income properties based on the Estimated Monthly Rental Income and the Listing Price.
MLS Deal Finder Rental Index Formula

A Rental Index of greater than 1.0 means a property can create cash flow to cover all monthly expenses of owning the property, with $0 down payment.

Rental Index Good Income

 

Every buyer has his/her own Rental Index

Generally speaking, a buyer usually puts 20% down payment when purchasing a property, so a Rental Index of 0.8 or greater can be a good rental income property for the buyer. On the other hand, if a buyer has to borrow a loan with a very high interest rate, he may need a property of Rental Index of 1.2 or greater.

Bottom line, the Rental Index is a general rule of thumb to decide if a property can be a good rental income deal. The higher the Rental Index, the more positive cash flow the property can potentially generate.



 

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Check out examples of Rental Income Properties we newly found:

Location: Grand Prairie, TX

List Price: $59K
Bed/Bath: 3/1

MLS Deal Finder Estimated Rent:          $1,404
MLS Deal Finder Rental Index:               2.38

This rental income opportunity is located at Grand Prairie. Priced at $37/sqft, this property is hugely discounted from the 4 sold comps we found in the same subdivision, which have an average sold price of $68/sqft.

In addition, based on the rental comps in the same subdivision, MLS Deal Finder estimated monthly rental value is $1,404 with minimal updated needed, yield a whopping Rental Index of 2.38 - this is a fantastic income opportunity for buy-and-hold investors. 

Location: Fort Worth, TX

List Price: $85K
Bed/Bath: 3/1

MLS Deal Finder Estimated Rent:          $1,099
MLS Deal Finder Rental Index:               1.29

This property has an estimated rental price is $1,099 in month, an attractive opportunity for a buy-and-hold investor.

 

Location: Lewisville, TX

List Price: $133K
Bed/Bath: 3/2

MLS Deal Finder Estimated Rent:          $1,467
MLS Deal Finder Rental Index:               1.10

A Rental Index of 1.1 makes this an interesting find for investors looking for rental income deals in Lewisville.

Rental Income Properties

Ready to start hunting for Rental Income Properties? With MLS Deal Finder, you get so much more. On any given day MLS Deal Finder finds discounted houses as soon as they are listed: Dallas Foreclosures, Short Sales, Fixer Upper, Sold As Is, REO, Bank Owned Homes, and HUD homes. 

In addition to houses sold by motivated sellers, we also find deals in estate sales, transitional neighborhoods, or simply houses that needs cosmetic upgrades. As long as the house is under market value, our proprietary technology will find it within seconds, and you will receive a real-time, detailed analytics report on each deal.

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