How Much Will My Home Rent For?

Created by Customer Support, Modified on Mon, 04 Sep 2023 at 02:54 PM by Customer Support

The best answer to this question can be found by requesting a

For existing owners / investors request an updated pre list market estimate either with your account manager, or a quick help ticket above

Our market estimate is created and finalized by multiple highly experienced people, not algorithms. Our estimates account for the timing of your peak opportunity to rent the home, not the past 6 months. Our market estimates are custom, take a little more time, and we stand behind them

If we can't meet our quoted estimated rate you can leave with no penalty if you like. Most stay. The rental market can change quickly and they respect that

If you insist on marketing outside of our quoted estimate, that will be fine, but you will have to accept full responsibility for the listings performance, regardless of minor complaints about quality, approach, etc

While it's tempting for an owner who's sure of their homes value to nit pick listing details as the cause of the trouble (details we usually don't control), the fact is about 7 major things really move the market for a decent home these days

1. Location

2. A reasonably (relative) cared for home, and in some markets a very high quality home

3. Size of home

4. Size of lot

5. A great presentation that is seen by at least 80% of renters (we estimate our listings are seen by 90-95% of qualified leads)

6. Fast follow-up with leads

7. Very convenient finished product showings for potential residents

Honorable mention: Wall to wall grey paint and LVP, quality fence, outside storage, secondary living duite

If you can't affect those things you are most likely left with nothing but a price reduction once a home has been on the market for 31 days especially, but we usually reduce homes our staff own every 2 weeks except in very slow general market periods

While not showing up on Zillow at all is a major hindrance since they dominate about 70% of the market as of recent reports from our providers, minor listing errors that we usually have no control over do not deter renters from finding and securing a decent value home. The market has softened, but it's far from soft and a rate slightly below the owners who are adamant about getting a summer rate or something similar will usually fetch a quality resident fast

Presentation helps a lot, but even that isn't a major market changing issue unless the presentation is simply terrible. For all the effort we put into amazing presentations, we consider it to be a pretty standard approach these days since most of our competition is Wall Street owned companies that use similar technology. We're fighting to keep up with them even though we do tend to present much better listings than our similar style competitors

At the end of the day if you have mostly covered those items above and the home isn't renting you have three choices you can actually count on to some degree

1. Wait for a better market (essentially season but that only works if the market keeps rising)

2. Reduce the price

3. Dramatically change the offering through renovations etc

Why might our estimate deviate from yours?

Especially post COVID this is a complex question requiring detailed research, experience, and foresight. As the hockey legend Wayne Gretzsky said, “I skate where the puck is going to be, not where it is”.

Almost all algorithms skate where the puck was 30+ days ago and that single fact leads homeowners and professional managers alike to make very costly pricing decisions. Our estimate is built by multiple real people, doing real research, and takes a little time for those reasons

The most important point regarding rental pricing is to keep in mind is that the market will always set the rate with minor deviations, regardless of how spectacular your marketing and presentation may be. We find that the individual question of monthly rental rate is not exceptionally helpful and at times can actually be misleading.

For example, if you rent a $1000 a month home for $1200 but have to evict the tenant after 6 months due to nonpayment, you’ve now lost out on nearly $2000 in pure expenses, and that’s assuming they don’t damage the property.

You would also have to factor in the additional vacancy, basic turnover costs, and perhaps marketing expenses to get the home rerented. If the eviction occurs in winter you will likely get 10-15% less than you would have gotten with a summer lease

For this reason we encourage you to view rental management through the lens of annual bottom-line profit, which reflects impacts from all aspects of the rental decision process

Setting a rental rate was once relatively simple. COVID changed that dramatically, but presumably we’ll settle back to a similar cadence. We look at three main factors, and then make adjustments from there

1. How many are there, and what are similar nearby homes currently listed for?

2. What have similar nearby homes been renting for?

Once we establish these two figures we then adjust for unique features the property may have, whether pets are allowed (more on that here), and seasonal or future trends, discussed here

Often there is sparse data on comparables, or a home is simply so unique basic adjustments won’t do the trick. Our system for setting rental rates addresses this issue extremely well.

We always point out that pricing is truly an art, not a science, and we approach the process with exceptional flexibility even in situations where we do have good comparable data.

Getting the best rental rate begins with presentation and marketing. A great home poorly presented and/or marketed will rent for a discount.

This is why we put so much effort into those two phases as it often alleviates problems such as low tenant quality, and ow ners who are unhappy with their income.

At this point we typically begin marketing the property 10-15% higher than the rate we expect to receive after analyzing the market data.

We then systematically reduce about 2-5% every 7-10 days or so. These reductions serve a multitude of purposes with the most important being the automatic notification emails that many receive when a home they have shown interest in is reduced.

This allows us to get leads interested over and over, create a sense of urgency, and to spike traffic just as it tends to start fading. If we can get the higher rate we will and often do, but we won’t be waiting and hoping.

We are instead objectively proactive as to what the market will bear relative to vacancy costs, and typically rent most of our homes after 2 reductions (figures vary by season, condition, and for properties that rent for very low or high rates).

When we complete your virtual rental evaluation we typically provide figures. The usually aggressive rate where we will begin marketing, and a bottom line rate we do not expect to have to go below.

If we do have to go below the bottom-line rate you are offered a no penalty cancelation at that time. We usually land near the top or middle of the range. If the bottom line rate isn’t an option for you, then its best that we not manage the property, as the market ultimately determines rate, and we don’t have a magic bullet.

Instead we do a lot of small things exceptionally well, and this typically adds up to excellence.

The rental market is much more fluid than many realize, and we like to be up front as to all possible outcomes. For more on pricing your rental visit this article