We are prepping our first property to rent starting Oct. 1.
It is a SFH built in '45. 1200 sq feet on one floor, and 600 sq ft unfinished basement with washer/dryer hook ups. 2 bed, 1 bath.
The neighborhood is blue collar, about half are rentals.
There is a duplex property next door with a unit listed for $750. It is comparable in square footage but does not have the basement or washer/dryer hook ups, plus one of the bedrooms is upstairs (very narrow stairs and steep ceiling angles in that bedroom).
Ther also is a nearby duplex where both units are studio apartments. One of which is listed at $625.
We can rent at $750 like the one next door and will bring home a profit of $325 after expenses.
But I am wondering if the SFH should bring a little more than a duplex?
@Angela Smith - a bit difficult to answer generally without knowing the location, but here is what I can tell you: of couse should single family bring more rent than a dupex!
The resons people rent a SFR over an apprtment accoring what they tell me at showings:
- want privacy / not hear their neighbors through the walls
- want a yard, maybe have a dog, would like to have friends over for a BBQ - think lifestyle!
- want more storage (basement)
- want to cut a lawn (yes!)
- want to have a private garage and a driveway to work on their car
- want to plant some flowers, tomatoes etc
You can see those are mostly lifestyle issues and people are happy to pay more if they get that lifestyle upgrade.
In my experience automated services like rentometer and zillow do not work very well with SFRs. You will have to check the market yourself, zillow and craigslist are good to start. See what is being offered for rent and take note of the condition compared to yours. $200 in swing for condition are normal in my market. Also make sure you dont benchmark properties that just sit there and never rent, you need to track those who rent out quickly. It would be a good exercise to do some mystery shopping and tour your competition.
Don't worry, it's not as difficult as you may think once you get into the habit of checking your comps for a couple weeks - you'll get the hang quickly.
Check sites like Zillow rental.
I would go on Craigslist, Facebook group for housing rentals, real estate website like Zillow/etc to compare rent.
You can look up what other people are trying to rent and what other people are actually renting at.
You want to stay at a competitive price because that $10-200 a month will make a difference to some people aside from location and condition.
Some people don't mind driving longer for lower rent and vise versa. It's better to have tenant occupied home with lower rent than no rent.