Once you’ve acquired a rental property and made it rent-ready, it’s time to figure out how much to charge for rent. Every landlord wants to get the highest possible rental income. However, charging higher rent doesn’t always translate to higher rental income. Appropriately pricing your rental property is crucial if you want to maximize your return on investment. A great approach to pricing your rental property is to find rental comps.
In this article, we explain what rental comps are and how to find rental comps using the best real estate investment software – Mashvisor.
Related: How Much Should I Charge for Rent?
What Are Rental Comps?
Rental comparables or rental comps refers to rental properties that are located in the same market as your property and have very similar features. Depending on your preferred rental strategy, they can be either Airbnb comps or traditional comps. By researching rental rate comps for your income property, you can determine what other successful landlords are charging for rent and how to optimize your rental pricing for the best rate of return.
If your rental rate is too high, potential renters will be turned away and your property will most likely remain vacant for a long time. Consequently, you will lose out on your monthly rental income. Conversely, if your rental rate is too low, you’ll be leaving money on the table.
The right rental rate to set is one that will allow you to rent your property for the longest possible time, for the highest possible rental income, and to the best possible tenant. Setting your rental rate based on what other comparable properties are charging is the best way to achieve this. Therefore, if you want to be competitive in your local market, it’s important that you learn how to find rental comps.
One of the crucial aspects of how to find rental comps is knowing what to look for. You want there to be as many similarities as possible with the subject property for your rental comp analysis to be accurate. Here are some of the key rental property characteristics to keep in mind when researching rental comps:
- Location
- Property type
- Number of bedrooms and bathrooms
- Square footage
- Number of floors
- Year of construction
- Amenities (balcony, garden, swimming pool, etc.)
- Availability and quality of furnishings
- Condition
- HOA presence
Nevertheless, you may not always find rental comps that are very similar to the property you are analyzing. In such instances, it’s okay to extend your rental comp analysis to properties with slightly different features so long as you account for the differences. To enhance your accuracy, your rental market analysis should include as many rental properties as possible. Try to find at least 5 rental comps.
Related: Where to Find Property Data Online in 2020
How to Find Rental Comps Using Mashvisor
There are a number of ways to find rental comps. For instance, you could drive around the neighborhood and collect rental property data, contact a real estate agent, or use real estate investor websites. But you are probably asking yourself “What’s the best way to find rental comps in my area?”
If you are wondering how to find rental comps for rental properties in the US housing market quickly and efficiently, I would recommend you use Mashvisor’s rental property calculator. This is one of Mashvisor’s real estate investment tools and is designed to help real estate investors get rental comps and do rental comparisons in a matter of minutes, regardless of their experience in real estate. What’s more, all the rental property data provided by our rental comps software is very accurate since it comes directly from reliable sources like the MLS, Airbnb, and Zillow.
Related: The Ultimate Rental Property Analysis Calculator
With the rental property calculator, you can get rental comps for any rental property listed on the platform. If you want to get the rental comps of a rental property not listed on the platform, you can simply enter the address first along with some other basic property info.
On the Rental Comps & Insights tab, you’ll find a list of Airbnb comps and traditional comps:
Traditional Comps
Mashvisor’s calculator automatically generates a list of traditional rental comps for any property.
If you want to rent out your property on a long-term basis, check the list of traditional listings. For each rental comp, you’ll be able to see the following data:
- Property address
- Degree of similarity to the subject property (Expressed as a percentage)
- Distance from the subject property
- Number of bedrooms
- Number of bathrooms
- Monthly rate
Airbnb comps
Using Mashvisor, you can access Airbnb rental comps and learn how much to charge.
If you are looking to rent out your property on a short-term basis, look at the list of Airbnb listings. All these Airbnb listings come from Airbnb.com. For each Airbnb comp, you’ll be able to see the following data:
- Property address
- Degree of similarity to the subject property (Expressed as a percentage)
- Distance from the subject property
- Airbnb occupancy rate
- Airbnb daily rate
- Airbnb monthly rental income
- Rating and number of reviews
Related: Airbnb Rental Data: Why Investors Need It Now More Than Ever
Apart from seeing the Airbnb and traditional rental comps and data, Mashvisor’s rental comps software also allows you to download them as a CSV file. Therefore, you can easily share them with your agent or network and get their insights.
Our rental comps software provides real estate investors with more than just rental comps. You can use it to conduct a comprehensive investment property analysis for any rental property in the US housing market as well. With the tool, you can easily access real estate data such as rental income, rental expenses (one-time and recurring), cash flow, cap rate, cash on cash return, occupancy rate, and optimal rental strategy.
The Bottom Line
Rental comps are an excellent way to determine how much to charge for rent. However, the problem is usually how to find rental comps that are accurate and reliable. The most efficient way to do so is to use Mashvisor. You’ll not only get rental comps but also insights to help you make smarter decisions.
To get access to our real estate investment tools, click here to sign up for Mashvisor today and enjoy 15% off.
