Zillow rent estimates on some properties look too high to be true

Cupertino, CA · Member since 2015 · 1 post · 1 vote

I am looking at Zillow to find properties to rent. In the "Manufactured" category, I see properties in Florida with very low prices and high monthly rent. That is too good to be true. Here are 3 examples:
1) https://www.zillow.com/homedetails/7111-142nd-Ave-Largo-FL-3... Price: $27,000 Rent: $5,557

2) https://www.zillow.com/homedetails/2882-Gulf-To-Bay-Blvd-232... Price: $12,500 Rent: $1,959

3) https://www.zillow.com/homedetails/7403-46th-Ave-N-LOT-347-S... Price: $12,900 Rent: $1,994

Even some Single Family Homes had very high rents. Two examples:

4) https://www.zillow.com/homedetails/169-Beatty-Ave-Richwood-O... (In Ohio) Price: $82,000 Rent: $2,199

5) https://www.zillow.com/homedetails/106-Grinnel-Loop-Sanford-... (In NC) Price: $375,000 Rent: $6,109

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Brian Adams

Residential Real Estate Agent · Dallas, TX · Member since 2013 · 232 posts · 173 votes

Zillow, of course, cannot tell when a home is in distressed condition. So that would be the first explanation for significant mismatches between the asking price and the Rental Zestimate.

But Zillow also struggles with property types. For example, several of the homes you are sharing here are manufactured homes, but I believe the Zestimate algorithm generally conflates those with brick and mortar single family homes.

Zillow is also at the mercy of agents who upload the listings. If a listing agent calls a "mobile home" a "manufactured home", then it will be misclassified in the algorithm and affect the price.

Zillow has a lot of property data, including from third parties against which it might check that data. But many of those companies (Corelogic, Black Knight) get their data from error-prone sources as well.

Data in the real estate world is poorly digitalized and structured, despite the best efforts of programs like RESO.

Which is a good thing for us! Those are information asymmetries we can rectify and profit from!

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Brian Adams
Residential Real Estate Agent · Dallas, TX · Member since 2013 · 232 posts · 173 votes
2y
Zillow, of course, cannot tell when a home is in distressed condition. So that would be the first explanation for significant mismatches between the asking price and the Rental Zestimate.
But Zillow also struggles with property types. For example, several of the homes you are sharing here are manufactured homes, but I believe the Zestimate algorithm generally conflates those with brick and mortar single family homes.
Zillow is also at the mercy of agents who upload the listings. If a listing agent calls a "mobile home" a "manufactured home", then it will be misclassified in the algorithm and affect the price.
Zillow has a lot of property data, including from third parties against which it might check that data. But many of those companies (Corelogic, Black Knight) get their data from error-prone sources as well.
Data in the real estate world is poorly digitalized and structured, despite the best efforts of programs like RESO.
Which is a good thing for us! Those are information asymmetries we can rectify and profit from!
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Rachel H.
San Antonio, TX · Member since 2009 · 3k+ posts · 1k+ votes
2y
@Sumitro Samaddar You'd probably have to confirm those rents during the due diligence process.
Also, the rent amount may include the lot rent if these homes are in communities or land/lots where you pay rent for the home to sit there as well. In these types of cases, the lot rent may be quite high depending on the area.
Hope that helps!
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Jonathan GreeneBusiness Member
Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
2y
You should not be trusting Zillow for rental estimates. Find an investor-friendly real estate agent who can actually help you because they know the local market. Don't trust a conglomerate that has incomplete data and is built to sell leads to real estate agents and trick consumers into thinking they can make contact with the listing agent.
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Wyatt WolffPro Member
Lender · Charlotte, NC · Member since 2019 · 467 posts · 279 votes
2y
As they said above, make sure to do your own comps/ get a realtor to help you.
I have a feeling that they are not accounting for the actual property type, just location and sqft/bed and bath. They have an algorithm that runs and applies estimates to the properties. They don't have people actually going behind and checking.
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Bradley BuxtonBusiness Member
Real Estate Agent · NV · Member since 2023 · 1k+ posts · 720 votes
2y
@Sumitro Samaddar
There are other rent aggregators in the market like Rent Cast or BP confirm with those. You can also call property managers in the area. As others have said you can tie up a deal and then confirm the rents. If it's an MLS listed property the seller agent would be able to get the rents.
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