Setting the rent at the correct price is an important skill for a landlord. Set the rent too high, and you will have higher vacancy, which cuts into your cashflow. Set the rent too low, and you will be missing out on cashflow from the higher monthly rent. How does a landlord find the right balance? Luckily in this day and age there are a lot of technology tools that can help a landlord with set rent prices. One of the best tools is Rentometer.
What is Rentometer?
Rentometer is a tool that allows a landlord to input basic property data, and it will analyze rental prices for the area. Starting with the free service, you can enter the property address, expected rent, number of bedrooms, and number of baths.
After entering the info, Rentometer will show you the average rent, median rent, and even the 25th & 75th percentile rents.
There are several different types of plans available that add additional features. A PRO Basic account allows you to add additional details like search radius, building type, and provides more detailed reporting. Reporting includes things like 3-year trend, detailed listing info for competitive listings, size, $ per sq ft.
How Much of a Difference Can Rentometer Make?
As we discussed above, the wrong rents can make a big difference in your cashflow. I think we all understand the problem with vacancies, but it’s easy to overlook low rent.
What if your unit is rented for $950, but rents are actually $975 for your area now? It’s only $25, right? Well that $25 is $300/yr. That’s a good chunk of your Landlord Insurance premium or your property taxes. How many units do you have? If you have 3 units and they are all $25 under market rent, then that’s $900/yr that you are missing out on.
What about when that lease renews. Maybe you want to do a small increase, and you raise them to $965, but rents have gone to $1000. Now, you are $35/mo under rent. That is $420/yr! There may be times when you want to rent a little under market, and that’s OK. However, make sure you know what the right rent is for your area so you can make an informed decision and you aren’t just guessing.
Hopefully this has been helpful when thinking about your rental prices. I know that Rentometer has been a helpful tool for our rental business. To learn more or to sign up for Rentometer, visit their site. Also, make sure to check out our other tools for landlords. If you have other tools, we’d love to hear about them. Send us a message or leave a comment.
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