Updated June 21, 2020
Whether you're looking to rent your property, it's a good idea to analyze the rents in the area. Understanding what the market is like before getting too excited over a price will save you a lot of time and anguish.
The following are some of the best practices when it comes to analyzing market rents in a neighborhood or city.
Consider Location
The more you have around you, the higher the rent. This makes sense because people want to be around schools, public transportation, shops, entertainment, restaurants, and other amenities. As an example, a downtown condo will rent for more than a sleepy neighborhood blocks away. Desirable neighborhoods will also command more for rent.
Property Factors
When looking at rental prices, you need to remember the factors that go into the rent amount. Identify the following when comparing properties:
• Type of residence (single-family home or apartment)
• Number of bedrooms
• Number of baths
• Square footage
• Lot size
• Property age
• Upgrades
• Amenities
Single-family homes are often more expensive than apartments. Properties with more bedrooms, baths, square footage, and bigger lots have higher rent prices, as do those that are newer, have upgrades, and many amenities nearby.
Vacancies
A vacancy is a significant factor in property rental prices. When there is a long time between renters, the rental rate usually decreases to attract more people to rent the property as soon as possible.
Transient areas often have moderate rental prices because people are often coming and going, which can be quite stressful for landlords. Areas where people don't regularly move in and out, the rent prices are much higher.
Purchase Price
When coming up with a rent amount for an investment property, it's essential to consider the purchase price. The goal is to pay off the property as soon as possible. This is done by offering the property for a rent amount that will not only bring in a renter but also pay as much of the loan principal as possible.
Use Rentometer for Help with Analyzing Market Rents in Areas
Rentometer is a tool that many renters and landlords use to gauge the going rental rate in specific areas. It does all the work for you when it comes to comparing different properties, cost of living for neighborhoods, and the location.
To use Rentometer, put in the location where you would like to move or where your property is located. You can then select the number of bedrooms and bathrooms. The results will show you comparable properties and how much the rent is for each of them. The tool will also give you the highest rental price, the lowest, and the median.
Landlords, we recommend pricing your rental around the median if you're anxious to rent it as soon as possible. Depending on the amenities you offer, you may want to increase the rent, especially if you have a month or two before you need someone to move into it.
* Check out our video, "How To Read A Rental Report," for specifics and filters you can use.
Renters, we recommend looking at rentals around the median range instead of going straight for the least expensive ones. Usually, properties with an average rental price will give you a fair number of amenities, and some of them will provide you with more than what you're probably expecting.
Start using Rentometer today for more information about rentals in your desired area. Contact us if you have any questions.
This article was written by the Rentometer Content Team. The Rentometer Blog features fresh takes and insights on rental housing topics, services, and technology.