General Question

kevbo's avatar

How do I determine a market-based rental price for a home?

Asked by kevbo (25603points) September 18th, 2009 from iPhone

Assuming I’m renting to strangers, how do I figure out a market rate? I’ve taken a cursory look at comps online, but prices seem to be all over the map.

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17 Answers

CMaz's avatar

They sure are.
For me if I wanted to rent my house. There is no way rent could even match my mortgage payment.
That is the killer. I would say how much of a loss could you afford?

dpworkin's avatar

You can probably get a listing of comparables from a real estate appraiser, then check it against local advertising.

JLeslie's avatar

When you say comps are you looking at what things have actually rented for, or are you looking at what people are asking?

kevbo's avatar

I guess what people are asking. If I’m not going to give someone I know a deal, then I want to make something extra to use as a repair fund. So I’d like to go as high as possible/pragmatic without looking ridiculous.

JLeslie's avatar

Well, what people are REALLY actually paying is the true barometer. What people want or are asking is not always realistic. As a realtor we use both, we look at what people are really getting and look at what the market is asking and make an educated guess on what will get showings and be realistic. If I am representing the tennant, I am going to really pay close attention to what has already been rented as the guide to what my clients should be willing to pay.

kevbo's avatar

Gotcha. So how do I go about doing this?

JLeslie's avatar

Tricky. Realtors have access through the MLS. It is probably difficult to get the information otherwise. Unfortunately, rentals are not recorded in public records like house sales. Are you competing with nearby apartment rentals? You could see what they are really rentng for. Are you against using a realtor? If you are in SE FL I can look it up for you?

se_ven's avatar

Like @JLeslie said, using a realtor would be quick and a knowledgeable one would help a great deal. But, you could get a listing of places in your area and call to see how much the rent is.

A person renting for the first time or two might make the mistakes @JLeslie is talking about and are common to people who are trying to sell their homes (they almost always ask for too much). But a landlord or company that has experience won’t want to waste time pricing their units above market value.

marinelife's avatar

You might also consider talking to a property management company. They may be willing to talk possible rents for your place as part of trying to get your business.

cwilbur's avatar

Look at Craigslist for your area, or classified ads.

Also, it’s not unheard of to negotiate on rent, so err on the slightly high side.

Judi's avatar

If you really want a good comp you have to get out there and shop the competition. Act like you’re looking for a place like yours and see (physically look) at what is out there. There is information you just can’t get on the Internet. How clean is it? Is the paint fresh? Does it smell like cats?
Relying only on electronic comps will cost you in the long run. Either you won’t charge enough or you will charge to much and not rent it. Get out there and LOOK!!

Response moderated
YARNLADY's avatar

I second what @Judi says. An agency is going to quote a high price just in hopes of getting you to sign with them. The numbers that the MLS has won’t show you the condition of the home, or the neighborhood.

You do need to be flexible, though, decide how long you want to go unrented. Also, be very diligent in checking references.

PerryDolia's avatar

Rents are calculated per square foot.

Call a property management company and tell them you have a house you want to put up for rent and don’t know what to charge. (They will be glad to help, thinking they are going to get some managment business.) When they ask you questions, provide a description of the property you are considering to rent. They will tell you how much per square foot. You find out the square footage and voila!

Judi's avatar

I am a property management company, and I can tell you that although square footage is a factor, it is far from the only determinig factor on setting rent rates.

cwilbur's avatar

Rent per square foot is a useful rule of thumb, but the location, the neighborhood, and the features of the house are all significant factors.

Don917's avatar

ACT LIKE A PROSPECTIVE RENTER…Actually take a look inside a few comprable rentals in your area. Nothing like actually seeing what you get for the money!!! This will give you a much better idea of what to charge for yours. There is a lot of trash out there for rent and the listings only show them in the best possible light !!!!!!

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