The most common question every investor asks is: How do I know if this is a good deal?
No one wants a bad deal. What if it's just an average deal? Knowing you're making the right, good, and confident decision is important with any investment. When you buy a stock, you review the prospectus. Real estate doesn't have a single prospectus to look through. That's where an experienced investor agent will provide the data and guide you through the pros and cons of each strategy.
The truth is, you can’t know if a deal is good unless you have something to compare it to. If you only look at one property in isolation, there’s no baseline. Is it priced high? Is it low? Is it average? Until you understand the market, it’s impossible to know.
Looking at comps alone doesn’t always tell the full story. For example, a house might sell for $1,000,000, but if the seller gave $50,000 in credits, the real effective sale price is closer to $950,000. That’s a big difference when you’re calculating returns. Look at finishes, location, views, traffic, major updates to utilities, and age of the property. A Zillow price can give you a false anchor price.
If you’re buying as a primary residence, “good deal” may mean something different; it’s about lifestyle and how long you’ll live there. For an investment, the timeline is usually five to ten years, with seven years being a pretty typical cycle. That’s long enough to ride out market ups and downs. This will factor into your overall strategy for the exit portion of your plan.
Ask yourself: how does appreciation compare with rental growth?
This goes back to goals and strategy. If pure cash flow is your play and a short time horizon, appreciation will be less important than rental growth and income.
Can you add value by adding an extra room, garage, deck, or other feature that a potential renter will pay more per month to have?
A $1M duplex with below-market rents might take six months or a year to bring up to market—but that requires time, money, and management.
On the other hand, a $750K duplex with market rents in place might not have value-add potential, but it’s already stabilized and hands-off.
What’s a “good deal” for one investor might not be for another. If you’re short on time, the stabilized property could be best. If you’re looking for forced appreciation, the value-add project might win. Real estate risk is lowered with time. A property bought 40 years ago looks like a great deal today.
Markets matter. In Lake Tahoe in Incline Village, a condo for $600K might look like a deal compared to luxury homes. But in Reno, you can find a condo for $210K that actually cash flows. Which is better? It depends on your strategy: long-term appreciation versus short-term cash flow. There will be different management energy for each as well.
This is where the Address Income search tool comes in. Go to https://search.addressincome.com/
You can get information on the entire market, watch for trends, and narrow your search in minutes rather than months based on your strategy.
Every property in the market can be plotted on a scatter chart, with cap rate versus purchase price, so you can instantly see how a property compares. Is it a good deal? From there, you layer in the condition, the financing terms, and access trained agents who can dial in your personal investment goals.
A “good deal” isn’t one-size-fits-all. It’s the property that matches your strategy, your timeline, and your resources. The key is comparison; seeing the full market picture, running the numbers, and making decisions based on data. That’s exactly what we do at Address Income. With our tools and our team, we help you cut through the noise and spot the real opportunities. Reach out for a casual chat or in-depth strategy session.