What are the best ways to do rent comps for SFH?
Single family houses are very different than apartments in many ways. One of the most distinct ways I've found them to be different is that there are rarely two identical houses. This means coming up with the correct rental prices can be very challenging at times because there are no direct comps and you need to come up with a different price for each property rather than one set price for an apartment community.
This can make coming up with accurate rental prices very important for property managers because if you list a property too high it will sit vacant collecting no money, and if you list it too low you will end up with a lease generating much less cash flow than you could have potentially received.
Here are a few ways I comp out my rental properties, but I am really looking for some advice on how everyone else comps out their properties and how I can improve upon my current methods.
Previous rental results with the same house - The first thing I base rent prices off of is previous results with that house and others in the area or of similar style and size. If I had trouble renting the house last time I know I was probably at the top of the market, if I rented it in 2 days I was probably a little low.
Previous rental results with my other houses -I've noticed with SFH's location can mean a lot of different things to different renters, sometimes they just want to be on the south side of town on a nice block and sometimes they want to stay in the same 3 block radius so using nearby results is great, but even houses across town can help me understand what the appetite is for people in my city. Often times people are willing to move 20 minutes away from their originally desired suburb to a different one as long as they can find the type of house they want in their budget. Because of this I usually look at what my other properties of similar type are renting for around the city to try and see what type of price I can get is for my current vacancy.
Craigslist - I use Craigslist as my main source of marketing, thus my houses will be competing with everything else on Craigslist. I want to be in line with my competition and if Im too high on my prices everyone will call the other guys ad that is listed right next to mine. If my price is too high (or too low) compared to what I see on craigslist I know I need to make an adjustment. I usually look in the nearby vicinity (the map tool is great for this) for what is in that neighborhood. It can be hard to find comparable properties sometimes, but venturing too far out means you are no longer competing against those ads in the same way. If their are no comparable properties it can be both a good and bad thing. I know anyone looking on craigslist for a house like mine doesn't have very many options which means I either can set the market myself with little competition or there isn't a high demand for my type of property.
HotPads- This website is similar to Craigslist and my second form of advertising. Hotpads takes info from Rentlinx and Postlets to show houses available much like craigslist does. I use it in basically the same way I use Craigslist but can usually find more comparable properties and they are usually better made ads meaning I know if the property on there is similar to mine or in much worse or better condition.
Rent-O-Meter- This website is designed for residents who are looking to see if their rent price on their property is reasonable. It has a lot of false information as people can type in whatever they want and it will create a new result on the site, but its one of the fastest ways to check to see if im in the ballpark with my prices. There is also no way to see if you are comparing against similar properties, a 2 bedroom 600 sqft apartment will look just the same on rent-o-meter as a 2 bedroom 1200 sqft house, but because this site has the most results so you can usually still get some helpful input from it.
Calling Nearby For Rent Signs-I don't really like this method and only did it when I started and didn't know much about rental prices. You can get the most info this way and really nail down the specifics of your competition but I don't like bothering people or being dishonest about my intentions telling them I am looking for a rental when I really just want to know the price, amenities and condition. You also can't actually see inside the property unless you take this tactic way too far and waste a lot of yours and other people's time. Its by far the most time consuming out of all the methods I've used and sometimes there are very few or no rentals in the area.
Again I'm looking for some feedback on ways to price out your rental homes.