As an investor-friendly Realtor looking to bring deals to your clients, it’s important to know their criteria first.
Investor-friendly Realtors can pull comps, determine which areas are trending, and which properties will best fit the investors’ needs.
Where to Find Rental Comps
Rent comps can be found using a variety of resources, including:
Offline sources for rental comps:
- The leasing agent has direct access to real-time information about prices charged by other investors and incentives they may be offering tenants.
- You can get advice from the property management company on how to determine the best rent for your property to attract qualified tenants.
- It’s also ideal to have friends at the club that invest because even though you’re competing, you can still find a satisfying JV partnership if a big deal arises.
Online sources for rental comps
- There is a free and paid service called Rentometer which allows you to compare your rent with those of other comparable rental properties in the area.
- A Rent Zestimate provides an estimated starting price based on local market trends. It also considers a host of factors, including the property’s physical characteristics, amenities, and recent upgrades.
- Live listings on Craigslist can give you an idea of what similar properties are available for rent near you.
Running Comps On MLS
Knowing what to look for when pulling comps is important.
Property values on the market tend to be less accurate as they could be over or underpriced in order to sell (or lease). Therefore, you should look first at recently sold properties.
The neighborhood and nearby amenities also contribute to assessing the list price of a property, so driving past the location can help.
Here are a few other factors to consider when conducting competitive market analysis on the MLS:
- Location is an important factor determining a property’s value since the desirability and attractiveness of a neighborhood often correlate strongly with listing prices. The use of Google Street View or Google Maps can be useful to assess a neighborhood’s aesthetic appeal as well as its proximity to amenities.
- Consider using free online tools like Zillow and HouseCanary to estimate the listing price and value of the property, as well as obtain an idea of whether values are likely to rise or fall. The fact that so many home buyers and sellers use free websites to check property prices and values gives insight into how the general public expects property prices to evolve in certain markets.
- After examining the listing, make a list of its qualities, such as location within the neighborhood, number of rooms, property size, and distinctive features. Using this information, we can find comparable properties next.
- Pull comparable properties from the MLS. Narrow down the search by looking for properties that recently sold or have recently hit the market. Look for properties with characteristics that are similar to those listed in the previous step. This includes square footage, number of bedrooms, baths, and lot size.
- If you have several MLS comps you want to use, you can calculate the average price per square foot by dividing the sale price by the square footage for each comp, and then averaging over all the comps.
- If there are any problems or upgrades with the property, you must also take into consideration any special features that cannot be compared with the original value.
- Set the listing price: After a thorough evaluation of the local market, property features, and value estimates, it’s time to list properties that fit your investors’ preferences. Consider the local market, the property features, and their price impact on the listing price.
Rental Comps Template
You should never rely solely on your memory when searching for comparable properties. We recommend using a detailed spreadsheet instead. It is crucial to use accurate comparables when determining a listing price for an existing property.
Even in the same area, rental property comps vary from neighborhood to neighborhood – and even street to street – so the closest comps to the property should represent the best value.
The following items should be included in rental comps:
- Location
- The rental value of the property
- Property market value
- Rental cost per square foot
- Lot size
- Accurate size of the property
- Single vs. multi-story
- Number of bedrooms and bathrooms
- Parking areas
- Appliances and upgrades (countertops, tiles, flooring, etc.)
- The construction date of the property
- Landscaping front and back
- On-site amenities such as front porch, swimming pool, playground, etc.
- Community amenities and access to public parks, transport, etc.
With the above information, you can compare comparable properties in a side-by-side format, enabling you to see each property’s description, tax value, and so on. Do it this way so you can compare and come up with the best properties that you can present to your investors.