I have a question about rents for multi families. A lot of the guides I've read on BP mentioned speaking to other investors in your area about what they charge for rents, using online resources like Zillow, Truilia, Craigslist, etc.
My question is how to determine a competitive rent to charge for a unit in a multi family home? For instance I plan on moving to Washington state soon, and I've been using Tacoma as an example. I've seen online that SFR 3Bed 1 baths 1000-1200 Sqft, that are in good condition rent for between $1200-$1400 per month.
So if I have a unit in similar condition, similar size and same number of beds and bath, can I charge that rate? Or would I need to charge a slightly lower rate since its a MFR?
I guess this might be a silly question, but I just couldn't find the answer online anywhere, so I thought i'd ask people with experience. I don't think this is really limited to Tacoma I am just using that as an example as I have been researching that area.
The rents are more about the area the building is located in than a specific type of building. Normally a given area will have similar types of buildings and it is those rental rates you will be comparing.
An apartment won't rent the same as the price of a house. It is the privacy vs community living. The services vs doing it yourself. Just speaking from what I see here. Depending on what you see you will be in the same range but trash and some utilities may be included in an apartment but you also don't have a basement to store stuff. It just isn't the same. That being said I don't think a duplex will rent much differently then a house it is when you get to a number of units it varies. Can't say if it would be more or less because it depends on what is included.
Good question! I too have seen apartments around Tacoma fetching lower rates than SFR.
I believe this is primarily due to the lack of a yard and privacy but may also rely on the quality of neighborhood apartments are typicall located in?
I would be interested to learn the opinions of others actively managing properties in this market too!
@ Pete Perez - Not a silly question, at all - in fact its pretty important!!
Regarding your question: My question is how to determine a competitive rent to charge for a unit in a multi family home?
There are many ways to do your research online but I've got to admit that coupling your online research with getting out and talking to solid real estate agents is a good way to better quantify rents in the area. I always take a glass-half-empty approach when looking at online ad's and real estate agent quotes for rents - when they're done independently. However I've found that when i combine both, I tend to get much closer to a realistic rent.
Best of luck.
Yeah, often multifamily rents for less - but keep in mind SFR often don't include utilities while MFR do. You also want to look at apartment complexes in your neighborhood and see what services they offer vs what you offer.
So, if all utilities are included you can raise the rents a little.
W/D included? that's worth more.
Yard? Privacy? worth more.
Pool / gym? worth more.
Next to school? worth more.
Next to a crack house? uh, lower your rent.
It might help you to make a list of standard services and average prices and see if your unit is above or below the average.
This is a really good question. I find asking other owners what they charge to not be a good method. Many people who own real estate do not run their units professionally. There is a building across the street from mine...same layout in all four units. Charges $725.00 per month. Market rents are nearly $400.00 per month higher. Also, equalization in my opinion doesn't help set a good rent structure. A pool that is never used or a gym in an apartment that is super small is not competition in my opinion, because they come with neighbors on both sides, up and down. Those large complexes need that stuff to compete with you, not vice versa. Dishwashers don't really factor either. Space is probably the best factor, but also consider if your unit has a garage versus other units. But vacancy, job growth, and whether or not your building is near shops, or some time of commercial corridor, are huge factors. If you are near these, your rent will go up based on market forces alone.
I use Hotpads and Rentometer, with more emphasis on Hotpads.
BTW, another building across the street from mine just got bought, all new tenants, listing for $1100.00 per month. And this is right next door to the $725.00 per month.
Rentometer.com I have found is a good starting point.
Amenities are everything (next to location). Utilities, Laundry, Community Room, Pool, Rec Room, Private Garages, lack of yard/grounds maintenance, secure access - - -
all these things are pluses to the apt / MFR.
I came across this when looking at HUD owned homepath properties. Hopefully this link works for you for Tacoma:
It's the only place I've seen that listed rental rates of SFH vs multifamily unit
Let me know what you think - if it jibes with what your research has already turned up.
(Edit: just realized that link was for a specific HUD listed property - but you get the gist)
@Pete Perez it completely depends on the unit. And be sure you can rent out separate rooms, etc., in your property, depending on zoning.
There is no way anyone can answer this question without knowing the zoning of the property, and how you intend to advertise it, and if that's legal.
Excellent point! I hadn't considered talking ot real estate agents on rent. I will give that a try. Have you had any success with talking to local property managers?
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