Rental Comp Determining Factors

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Rental Comp Determining Factors

Zac Bowden
Fort Worth, TX · Member since 2021 · 4 posts · 4 votes

Hey y'all,

I'm new to this real estate game and new to posting on BP. I am wondering if anyone considers square footage or a property's age when determining rental prices. For instance, would an older or smaller home still rent at a similar rate to the market average given that they had the same amenities and appliances? If these are not things you consider when determining rent for your property, what are some factors you compare or reference?

I appreciate any input, cheers!

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Joe FunariBusiness Member
Real Estate Agent · Keller, TX · Member since 2017 · 850 posts · 825 votes
4y

@Zac Bowden when running rent comps here in the Dallas/Ft. Worth area you look at plus or minus 300 square feet to get "comprable" rentals. You don't look at age for rentals. But making sure that the comps you pull have similar finishes, updates, appliances, etc. But also make sure you are comparing the same number of bedrooms, bathrooms, and garage spaces too. A good rule of thumb is get 6 total comps and pull the average rents. You should be able to lease quickly based on these averages.

Also, Texas is a non disclosure state. So rent and sales data isn't public info. So third party sites, such as rentometer, you need to take with a grain of salt. Also, you need a good understanding of statistics to remove the outliers when looking at rent data on that site. Its amazing the pricing swings you get. Your best bet is to work with an investor friendly realtor that can pull comps. Or a property management company. They will be able to pull accurate rent or sold comps too.

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  • Account Closed
    Real Estate Agent · Boise, ID · Member since 2021 · 24 posts · 11 votes
    4y

    Good question Zac. From my understanding, the condition of the rental plays a factor more so than the age. As for size, the number of bedrooms and baths seem to be the most significant factor regarding rent rates but I'm curious to see what others say about square footage. For your specific market, you could call up property managers and get their opinion.

    This is a quick informative read for determining rent rates:
    How Much to Charge for Rent in 2020: A Landlord's Guide | BiggerPockets

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  • Joe FunariBusiness Member
    Real Estate Agent · Keller, TX · Member since 2017 · 850 posts · 825 votes
    4y

    @Zac Bowden when running rent comps here in the Dallas/Ft. Worth area you look at plus or minus 300 square feet to get "comprable" rentals. You don't look at age for rentals. But making sure that the comps you pull have similar finishes, updates, appliances, etc. But also make sure you are comparing the same number of bedrooms, bathrooms, and garage spaces too. A good rule of thumb is get 6 total comps and pull the average rents. You should be able to lease quickly based on these averages.

    Also, Texas is a non disclosure state. So rent and sales data isn't public info. So third party sites, such as rentometer, you need to take with a grain of salt. Also, you need a good understanding of statistics to remove the outliers when looking at rent data on that site. Its amazing the pricing swings you get. Your best bet is to work with an investor friendly realtor that can pull comps. Or a property management company. They will be able to pull accurate rent or sold comps too.

    1Reply
  • Zac Bowden
    OP
    Fort Worth, TX · Member since 2021 · 4 posts · 4 votes
    4y

    @Joe Funari Thank you for the information Joe! I was curious as the BP rent estimator lists square footage and year the property was built.

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  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    4y

    When running comps, we look for homes similar to the target property. Square feet, year built, and condition of home are all factors I take into consideration.   

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