Rentometer ? Compare Rent Rates
To determine your rent price, consider local rent control laws, the rental rates of homes in your area (rental comps), the features of your home and changes in your local market. To get a quick starting point, try our free Rent Zestimate tool. To learn more about pricing your rental, check out this article
Rentometer – Compare Rent Rates
As a landlord, you may consider increasing your rent if market rates, property taxes, insurance premiums or homeowners association fees have increased. Also consider if there are property maintenance expenses that need to be covered. This guide can help you make your decision.
Simply enter the property address, a dollar amount of the monthly rent, and the number of bedrooms of the rental unit. Rentometer will then compare this with its database and tell you how this property looks compared to other like properties in the vicinity.
Rentometer provides essential tools for the rental housing industry. Everyone from landlords, property managers, owners, and renters can research and compare rental rates for free on Rentometer.com. In addition to the rent comparison tools exclusively found on Rentometer, the company offers landlords and property managers information and access to products, services, and technology used in rental housing operations and maintenance.
Rental comps are important when carrying out investment property analysis. Basically, rental comps refer to other comparable properties within the same neighborhood as your property. How other properties of the same type and within the same area perform indicates how your property will also perform. You could also use rental comps to determine how much to charge as your rental rates.
Rentometer is one of the cheapest and easiest ways to access information about rental rates in areas of interest. However, is Rentometer accurate? How reliable is this information? Can you have 100% confidence in the data you get from the platform?
To do this, I recommend also tapping into other resources such as Craigslist and the MLS or Realtor.com. Pull up rental listings and see how your property compares in amenities, features and condition. Visit some of the properties to see how well they show. Only then will you be able to confidently price your rental just under the market rent to maximize profits.
However, per unit rents from multifamily income property are usually lower on a per square foot basis when compared to single-family homes. In the example above, even though the multifamily property is twice as large as the single-family rental, the per square foot rent from the multifamily is less than the single-family house.
You can also use the 1% Rule as a way to ballpark what the rent should be, then compare the result to your rental comps. The 1% Rule simply states that a rental property should generate a minimum gross monthly rent of at least 1% of the market value.
We collect data on a daily basis from all across the country. Most of the data is listing data, so it reflects asking rent for the most part. We do have some landlords and property owners providing actual rent data, however, that is relatively small compared to listing data. Also, we only use the most recent data for a specific rental. So, over the years, we may have picked up 3 or 4 listings for a particular rental, however, we only use the most recent rental in the analysis.
Since this is such a tough nut to crack, I've found that the most reliable way to get an accurate idea of rent rates is to get some current pictures of the property (inside and out), contact a local property manager and ask them:
Rental comps, or rental comparables, are a tool used by investors to compare similar rental properties within the same location. Comparing similar properties can give investors a ton of insight into the real estate market and how their property could succeed in that area.
Finally, you can get some of the best market insight from your local property managers. Rental property management companies in Northern Virginia can help you compare similar properties and determine fair rental rates for your property.
When determining rental rates, you want to strike just the right balance between maximizing your profit and remaining competitive in your local rental market. Following are some tips for finding that magic number.
RentometerRentometer is a great web-based program that will allow you to see how you rank in your neighborhood. Just enter your address, rental rate, and number of bedrooms to gain access to a computerized graphic showing where your rates fall in comparison to other rental rates in your immediate area.
This news might make it tempting for owners to immediately assume they can charge top dollar for their rental properties, but rent prices are affected by market rates specific to the location of the property. Here are some tips that will help you determine an appropriate amount to expect tenants to pay to live in your rental property, based on finding out the fair market rent in the area.
Additionally, there are several resources online that allow a property manager to access rent comparison tools that will help you discover rental rates in your area, compare them to similar properties in the neighborhood and assess the potential return on your investment.
I've talked about using Rentometer in the past. Its an easy website to look up rents in your neighborhood. I think its a great tool for landlords to get data to know how to set your own rents. Zillow has also started publishing their own rent estimates. Or as they call it a Rent Zestimate. They explain What is a Rent Zestimate on their site. I decided to compare the Rentometer numbers with the Zillow Rent Zestimates.To do a comparison I just pulled up the numbers on Rentometer and Zillow for three of our rental properties. I'll label the properties A, B and C. The three properties are all single family homes. A and C are in our local area but about 25 miles apart in different cities while property B is in another state.Here is the data on our three properties: A B C actual $1,100 $1,000 $1,080 Rentometer med $1,095 $875 $903 mean $1,097 $932 $930 20th $963 $775 $850 80th $1,238 $1,073 $1,100 Zillow zestimate $1,323 $1,124 $1,174 $1,200 $989 $892 $1,500 $1,300 $1,300 The Rentometer numbers give median rent, mean rents and also the figures for the bottom 20% threshold and the top 80% threshold. So for example with property A the cheapest 20% of the market is at $963 or less, the middle is at $1,095 and the most expensive are over $1,238. The Zillow numbers give the Zestimate and then their estimated range of rents.Difference from ActualIf I just look at the Rentometer median rent and the Zillow Zestimate figures and then compare those to the actual rents we can see how far off the basic estimates are from my rents. A B C avg rento 0.5% 13% 16% 9.8% zillow 20% 12% 9% 13.8% The Rentometer numbers are closer. For property A its only off by 0.5% or $5. The worst for Rentometer is off by 16%. Zillow is off by at least 9% and as high as 20%.For property A the Rentometer number is almost spot on but Zillow is way off. I got about equal but opposite results with property B with Zillow high by 12% and Rentometer low by 13%. Then on property C again Rentometer is low but off by a bit more and Zillow is high by a bit. Looking at it property by property its basically a tie between Zillow and Rentometer. Rentometer wins one, Zillow wins one, and they're tied on the other. However for the one pproperty A the Zillow estimate is far off while Rentometer was almost exact.Overall comparing the actual rents to the basic estimates of median rent on Rentometer and the Zestimate from Zillow, I'd give Rentometer a slight edge. But my sample size of 3 houses is far too low to draw any meaningful conclusions.Accuracy and Data sourcesZillow lists the accuracy of their Rent Zestimates for the major metropolitan areas. Generally speaking they are within 20% of the rent price around 80% of the time. And in most markets they are within 10% of the actual around 50-60% of the time. Their median errors are in the 7-10% ranges typically. Zillow uses a 'secret formula' to devise their rent Zestimate numbers. That means they look at rent values but then run it through an algorithm to come up with an estimated rent value for your property based on the nature of your property. I assume they use basic stats like square footage of the house, size of the lot and number of bedrooms and bathrooms. They may use other info like crime statistics or demographics, but I have no idea... their formula is a 'secret'. Zillow should be more useful then assuming that their figures are accurate. But they're still off by 10% or more around half the time so it doesn't seem particularly precise.Rentometer polls rents in the neighborhood. They start with actual rents from nearby rentals. I can't find any data on Rentometers accuracy but they're really just reporting actual numbers so I assume their actual numbers should be correct. They only look at your address and the number of bedrooms. This is kind of crude really. They would give the same results for a 5000 sq ft. penthouse condo with 3 bedrooms and 3 baths as they would for a 1200 sq ft 3 bedroom apartment in the basement of the building next door. Which one is Better?I wouldn't say that one or the other is necessarily 'better'. They are different. It depends on the situation. In general I'd look at both and use them each as data points but keep in mind their limitations. I wrote about how to set your rent in the past. One of the best resources is manual searching of comparable listings on Craigslist. Don't just stop with the quick and rough estimates from Zillow or Rentometer. They are really only ballpark figures. I think that spending the extra time to research rent rates is important. --