I check out Zillow website and find out my rental property is $275 less.
Are their Zestimate for sale price and Rent Zestimate for rental accurate?
What other good resources to figure out if my rental property is in fair price?
My 3 years tenant (a family of 4) is good. The lease is due end of May and I believe they will continue to rent. Will it be too late to inform them $200 monthly increase? The lease doesn't mention when to increase the rent. What is the reasonable % for rent increase? Also, can we request for inside house inspection? It has been 3 years, I hope they maintain the house reasonable. The property is in Northern Virginia.
One tool that is helpful is Rentometer. Also other sites that offer rental listings may have a similar tool. I also check rental listings in the area; MLS, newspaper ads, Craig's list and online websites. the old fashioned but reliable way is to do rent survey by knocking on doors and asking what they are paying.
$200 seems like a pretty big increase to me. I usually look at what is the inflation rate and use that as a starting point.
A good lease should give you the landlord the right to inspect the property, usually with 24 hours notice. If it is not in your lease have them sign a new one that includes that clause. They will have to sign a new lease for the increase anyway.
Thanks Raymond and Ned's promptly response.
Remtometor finds 1000 properties within 7.4 miles and indicates my rental may be too high (in RED). The interesting thing is more than half of properties are in RED. It seems the high rental price is NORMAL. I only need to enter the property address and the number of bedrooms, not sure if other factors are part of comparison. Anyway, it is a helpful tool.
for me the rental amount on zillow seems to be very accurate, the only problem I have with rentometer is it seems to establish an apartment rental rate, not for a single family home
The current rent is $2,700, if I try to match the suggest rent in Zillow to $2,900. It will be 7% increasing which is higher than potential 4% inflation rate in 2012, according the follow website. What is the rental industry standards here? Can I increase the rent every year according the inflation rate?
BTW, the property neighbor is highly seeking by military family, my tenant is a military family too. They are the first family came to see the property and immediately signed the contract. I was surprised it rent out so quickly. If I knew Bigger Pockets at that time, I could get more resources! Members in Bigger Pockets are very professional and helpful, this is well management website.
I use Zillow to estimate rent prices with one caveat. I don't rely on the rent zestimate. I only look at the actual advertised rental properties. From previous experience reviewing MLS information, listed rent price is typically the actual rented price. If there are not a lot of comps currently up for lease, you may need to check other sources. Rent 0 meter is cool, but it includes apartments which skews the data IMO. You can also use Realtor.com to the same affect as what I use Zillow. I just like the map interface of Zillow. Realtor.com has a cool map app for a smart phone that I like best, though.
An agent can give you actual "sold" lease rates on similar houses in your area. The other online sources I find to be pretty accurate sometimes and other times 20% - 30% off. The problem is you don't know which accuracy you're getting with any particular property.
You can also do a rent survey, which involves calling other rentals off craigslist or whatever is the dominant source in your area. Some people pretend to be a potential tenant but I've found that if you just level with the landlord you can get some good information. Some landlords will be happy to give you info, while others won't, don't worry about the secretive ones, just talk to the others.
You should also consider talking to a local property manager to gauge what they would rent the property for. In addition, I would talk to members of your local REIA.
The problem with online sites is that they're just guides and not based on "closed" sales since the lease agreements are not typically recorded or made public.
I mostly rely on two things:
Other postings for comparable places, and my gut feel (which includes my other places currently rented and feedback from potential tenants).
Rentometer I use as one source, but I do no put much value on it. I don't use Zillow and friends, since I think they are mostly far off, same as with their Zestimates often.
My main source is listings on Craigslist in the same area, taking size, condition, features, and neighborhood into account.
When I read $200 increase I thought "damn", but it is "just" 7%. Still, I would probably not push beyond 5% depending on the market and when the last increase was, especially if the tenant is good and you want to keep them.
Generally, I think inflation has a limited direct impact on the rent. Some areas increase lot more, some decrease. Same with house prices, in the recent years they were certainly not quite in line with the inflation rate. When the coal powerplant opens up next door, a 5% inflation doesn't help you. And if you have the hottest place in town and students can't find a place to live, you couldn't care less about a 1.5% inflation, but rather jack up prices every year up to what the market can bear.
My family and I had to relocate for one year for an amazing job opportunity. We too are in the northern Virginia area (DC subs) and since it's only a year we rented. We signed a 1 year lease on a 4 bedroom 4.5 bath 4000 square foot house with a large fenced in yard and a pond. The asking rent was 2700 per month. It was on the market for a while so I negotiated the rent to 2600 per month. The house is in a terrific neighborhood and only a few years old. I think increasing the rent by $200 is very risky. If I were the tenant I'd move out. I'd check craigslist. That's what I do with the rentals we own, also near military post. Another tool would be to check the BHA (basic housing allowance) for your area. That's how much the military gives them for living and a lot of military families won't go much higher than that, mainly because they can't afford to. Good luck!
I use 4 things when trying to estimate rent:
1) Zillow - put in the address and look at rents. Can zoom to your subidivision.
2) Realtor.com - put in the town and then set for rentals. You can map the results too so you can get down to the same subdivision.
3) cragilist
4) Local paper website
Typically, I see several of the same units listed in multiple places. But this gives me some piece of mind that I'm covering all my bases.
Whats nice about some newspaper website is that I can look at ads for the previous 30 days and really see how long they lasted.