Rentometer for Cashflow screening
Hello everyone! I'm looking for my first rental property, a condo in Chicago. I've been using Rentometer.com to quickly screen potential cash flow for MLS listings my agent sends me. Can you share your experiences with Rentometer's accuracy, or suggest any other tools? Thanks!
It's fairly accurate, however, I would make sure you're also setting the parameters correctly. For instance, make sure you're setting the sq footage (I typically flex 200 sq feet on either side) and the correct unit type (apt/condo instead of house, which can only be done via laptop).
For other tools, I would suggest looking at the available rentals in that area and how they measure up to your prospective property. You mentioned a condo in the city, so there should be plenty of nearby condos you can use for comparison, if not even in the same building.
I would also HIGHLY suggest you make sure to check with the building's HOA policy on rentals, not all condominium properties allow rentals, so you could waste a lot of money buying something you can only use as a personal residence.
#2 Starting Out Contributor
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- Austin, TX
There is nothing better than real rental comparables on the MLS. Your realtor should be able to provide you that.
I agree with @Eliott Elias. When running analyses I always pull rental comps from the MLS. My brother has been using rentometer for comparison and I've found his rent estimates to be way higher than what I project using MLS comps.
#3 Short-Term & Vacation Rental Discussions Contributor
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#3 Short-Term & Vacation Rental Discussions Contributor
- Lender
- Austin, TX
I've definitely found that BP's rentometer is more conservative as compared to other rental forecasts tools I've used (dealcheck.io to be specific).
Quote from @Fernando Lozada:
Hello everyone! I'm looking for my first rental property, a condo in Chicago. I've been using Rentometer.com to quickly screen potential cash flow for MLS listings my agent sends me. Can you share your experiences with Rentometer's accuracy, or suggest any other tools? Thanks!
I've found the Zillow rental estimate calculator to be fairly accurate. It will also produce a report of recent listings. You can find the site here:
Rentometer is not particularly reliable. From my understanding, whenever someone types in the rent of their unit it puts it in there so people guessing what they might rent it for it takes that down as data. (It could also be vulnerable to trolls.) But moreover, it doesn't differentiate between houses and apartments. For me, it's just to get a rent price ballpark.
Comping the property on sites like Zillow or Trulia or using a service like RentRange.com makes much more sense IMO.
I've found Rentometer to not be very accurate since it doesn't take into the condition of the property. I'm doing my searches as a buyer, not a real estate professional. On my San Francisco Bay Area SFH which was renovated last year, it was low by $1200 to $1500, which is significant amount. On my Indianapolis properties, it ranged from being high for a SFH in nice suburb (in good condition built in 2005 but not updated with granite countertops and LVP flooring). I've seen other owners advertise their homes for that high Rentometer rent and have to lower it. For my SFH in the city of Indy (recently renovated in a developing neighborhood), it was accurate. Some of those transitional areas where you have older homes rented out and updated ones have rents covering a wide range.
I would do search on Zillow or Redfin for rental comps or better, talk to property management companies - they're the ones advertising and screening for tenants so their numbers would be accurate.
Side note: if the HOA fees are high, that could really affect your cash flow. I sold a condo in the Bay Area because of the ever increasing HOA fees (went from $445 to $605 a month in just over 2 years). Good luck!
@Fernando Lozada Rentometer is great but MLS is best!
Its ok... the best source is a local property manager. Call a few of them- give your address and they will give you the most accurate numbers, don't rely on a random machine. Most properties with PM companies don't even hit zillow- which is where renotmeter get numbers from. So its not the entire picture. however Pm's are human and actually showing the houses, and know the numbers. Call the human :)
#1 Classifieds Contributor
The MLS is the only data that is actually verified.
CHALLENGE: Less than half of rentals go through the MLS, so there isn't always enough data points to be helpful.
Zillow has everything the MLS has, PLUS PMC's and individual landlord listings.
CHALLENGE: No one actually reports what a lease "sold" for or verifies it. All you know is what it listed for
Rentometer: has same challenge as Zillow.
BEST to use all three to make sure you have enough data points to reference and then try to average out the data points for the best comparables.
rentometer, rentcast, current and past rentals listed on Zillow nearby. MLS is not always used for rentals in some markets as much as other platforms.
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Quote from @Scott Allen:
rentometer, rentcast, current and past rentals listed on Zillow nearby. MLS is not always used for rentals in some markets as much as other platforms.
Hi @Scott Allen how one can find the past rentals on Zillow? I can only see past sold listings but not the past rentals.
Hey @Fernando Lozada - I think you'll find it to be pretty accurate...we used the paid version and try to double-check it with the MLS...the most important aspect is the sample size.
Here is Chicago we've generally found it to be at first glance worth using.
@Fernando Lozada we have been using Rescover as a tool to underwrite and skip trace.
Hey @Fernando Lozada - if it's a condo, you can most likely look at other rentals in the building to check prices but other than that I would use everything at your disposal like MLS, Zillow, and rentometer.