Landlords: How to Determine the Rent Amount for Your Property
I want to present several resources where a real estate investor or property owner can determine what rent they can charge for their investment property. The three most popular websites available for this purpose are Zillow.com, Rentometer.com and Craig’s List.
Zillow is the most popular and respected, so we’ll start there. To go Zillow.com and enter the address of your property and then click “search”. Click on the word “rent” or “Zestimate”, both will give you rent estimates. The word Zestimate (Zillow’s rent estimate) should appear with the rent amount and the range that Zillow thinks the property can rent for.
We know that Zillow is not perfect. Zillow uses computer models and they are basing their Zestimate rent on averages in the area that have similar characteristics of your property, that is, square feet, similar number of beds, bathrooms, etc. Again, no computer model will be perfect, but overall, Zillow is accurate. You must be realistic about the property and observe its characteristics. If your home is a multi-unit building or your home is in some way different from any other property in the neighborhood, the Zestimate may not be accurate.
The second site is rentometer.com. Once on the site, enter the address of the property. On this site they ask how many bedrooms are on the property. You can also provide other information that could make the rent estimate more accurate. Once you have entered all the information, click “submit.” The site will give you an analysis similar to that of Zillow and a range where they think the rent may drop.
Another good way to get comparable rent is Craig’s List. Craig’s List has had problems in the past related to scammers and fraud. But when it comes to determining rental amounts, it’s pretty accurate. On this site, you would do a slightly different search. You should go to Craig’s List for your area, go to the “Apt / Houses” section and write your city. Or, if it is a development, you can type the name of the development. Then enter the number of bedrooms and / or bathrooms. At that time, many houses or apartments will appear in your rental search. Then you need to review them and see if any of them are similar and resemble your property to compare apples to apples.
Keep in mind that these are estimates and you will have to test the market to really know how much you can rent your property per month. We do not recommend that you try to “go high” and think that you can trade down. This rarely works in today’s environment. In general, if you overvalue your property in hopes of getting more rent, it will simply be ignored and you won’t get traffic or potential tenants.
My best strategy is to use the resources above to get a rough estimate of the rental price of your property and then price it a little lower. This should attract a lot more fees and can result in a quick move rather than overpriced and the property sitting vacant for weeks or months.