Landlords: how to determine the amount of rent 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 your property address 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 by which Zillow believes the property can rent.

We know that Zillow is not perfect. Zillow uses computer models and is basing your Rent Zestimate on area averages that have similar characteristics to your property, i.e. square footage, similar number of beds, baths, etc. Again, no computer model will be perfect, but Zillow is generally accurate. You will need to be realistic about the property and look at its features. If your home is a multi-unit building or if your home is 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 in 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 a Zillow-like analysis and a range where they think the rent may fall.

Another good way to get a 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 rent amounts, it’s pretty accurate. On this site, you would perform a slightly different search. You would go to Craig’s List for your area and go to the “Apt/Houses” section and type in your city. Or, if it is a development, you can type the name of the development. Next, enter the number of bedrooms and/or bathrooms. At that time many houses or apartments will appear in your rental search. You then need to review them and see if any of them are similar and look like your property to compare apples to apples.

Please note that these are estimates and you will have to test the market to really know how much your property can rent per month. We do not recommend that you try to “go high” and think you can trade low. This rarely works in today’s environment. In general, if you overvalue your property in the hope of getting more rent, it will simply be ignored and you won’t get any traffic or potential tenants.

The best strategy is to use the resources above to get a rough estimate of your property’s rent and then price your property a little lower. This should attract a lot more fees and can result in a quick move-in rather than being overpriced and the property sitting vacant for weeks or months.