5 Ways to Find and Run Rental Comps – Investors Guide
As investors ourselves (who were also wholesalers), we’ll give you the down-quick-and-dirty, best solutions to finding and running rental comps.
(There’s also a bonus section below on how to FIND RENTAL deals OFF-MARKET — so stay tuned for that)
Let’s dive into the best most accurate way:
1. MLS (Most Accurate; hardest to get)
The MLS, or Multiple Listing Service, is essentially the grand library of real estate. Here, properties for sale are listed in meticulous detail. It’s a treasure trove of data, making it the most accurate source for comps.
But there’s a catch.
It’s like a members-only club: typically, only licensed agents have the keys. But hey, we wouldn’t leave you hanging.
Here are a couple of ways to get your hands on this invaluable info:
1. Network with Agents: Building relationships in real estate is crucial. Befriend agents. Sometimes, they might just share MLS data with trusted investors.
2. Paid Software: Some software solutions offer access to parts of the MLS data. While not as comprehensive as having full access, it’s a worthy alternative.
The MLS might seem elusive, but with a bit of ingenuity and networking, it can become one of your most powerful tools in the world of real estate investing.
2. Free Listings (Free; Not as accurate)
Navigating these sites is like window shopping. You see a lot, but you don’t always get the full picture.
The free sites I’m talking about are:
1. Accessibility: Open 24/7. No memberships, no barriers. Just hop on and start browsing.
2. Volume: They boast a vast number of listings, providing a good initial gauge of the market.
1. Accuracy: Here’s where the grain of salt comes in. The data can sometimes feel like it’s playing hide and seek. Prices might be outdated or not reflective of the current market.
2. Missing Data: While you’ll see many properties, some might be conspicuously absent. Important details like days on market or price changes? Often, they’re MIA.
In order to pull up rental data you’ll have to filter it like this:
3. Network (Free; but requires work and time)
In an era of high-tech, the high-touch method of networking remains undefeated in its depth and authenticity.
1. Calling on Property Managers: Think of them as the custodians of rental secrets. A quick chat can give you the current pulse of rental rates, high-demand amenities, and even insights into tenant behavior.
Here’s a script you can say:
“Hi I’m checking out a property that I’ll be making an offer on, I’m curious as to what you think the rent would go for with a professional property manager managing it… would you be open to giving me your take on what it should rent for?”
2. Drive the Blocks: Old-fashioned shoe leather (or tire rubber) can reveal much. Spot rentals, call on them. Often, you’ll get direct access to landlords.
They can provide real, current data – not just what’s advertised, but what they’re actually getting in rent.
3. Engage with Fellow Investors: At the coffee shop, REI club, or online forums. Their experiences, successes, and even their mistakes can be your compass. They’ve been in the trenches and can offer real-time, hands-on insights.
Sure, networking requires effort and maybe a smidge of charm. But the insights you glean are organic, raw, and hyper-relevant. It’s like having a backstage pass to the real estate concert.
4. Software (Paid and Free; somewhat accurate)
1. Propstream: This is like the Swiss Army knife of real estate tools. Not only does it provide you with MLS data, but it also taps into county records. From residential to commercial properties, Propstream’s comprehensive data sets can save you hours of manual research.
(Here’s our review and pricing guide on Propstream)
2. AirDNA: Targeting the vacation rental market? AirDNA is your new best friend. It provides insights specifically tailored for platforms like Airbnb and Vrbo, making it a standout tool for anyone venturing into short-term rentals.
3. Rentometer: Simplicity is Rentometer’s middle name. Just punch in an address, and you’ll get an immediate sense of the going rent in that area. It’s a quick pulse check and can be especially handy for those just dipping their toes into the rental game.
4. Mashvisor: From rental income estimates to occupancy rates, Mashvisor can be a goldmine of data for investors. It even offers neighborhood insights, ensuring you’re not just looking at properties, but the bigger picture.
Bottom line? Yes, these tools come with a price tag, but think of them as an investment. An investment that can help ensure your other investments are, well, sound.
5. Your own knowledge (takes time)
Don’t undervalue this. As you delve deeper into the world of real estate, every deal you evaluate, every offer you make, paints a clearer picture of the rental landscape. Over time, neighborhoods start whispering their secrets. That three-bedroom in Eastwood? It’s going for a premium now. The studio apartment downtown? Prices have dipped.
Of course, it’s not about ditching the tools or ignoring the data. It’s about combining hard data with your own evolving understanding. Remember, every seasoned investor started as a newbie. With each deal, you’re not just gaining a property or missing out on one, you’re amassing invaluable market intelligence.
And here’s a nugget of truth: That intuition, cultivated over time, becomes your secret weapon. The one thing algorithms can’t replicate.
Finding the Perfect Rental Price: Comping Your Rental
You’ve got your stack of comps, each one a little story of what’s happening in your area. Now, how do you mold these tales into a solid price tag?
Matching Houses: Remember, apples to apples. You wouldn’t compare a penthouse in Manhattan to a studio in Brooklyn. It sounds obvious, but it’s shocking how often this is overlooked.
1. Size Does Matter: Your rental’s square footage is its footprint in the market. If comps vary by more than 5-10%, recalibrate.
2. Location’s Nuances: Classifications matter. A serene suburban spot can’t be compared to the buzz of a downtown dive. Know your neighborhoods.
3. The Room Riddle: This isn’t a straightforward puzzle. Sure, more rooms generally equate to a higher rent. But here’s where market quirks come in. In a college town? That three-bedroom might just be golden.
4. Condition & Presentation: Be brutally honest. If your rental’s seen better days, it might be time to either spruce it up or adjust the price. Some tenants are willing to trade a few quirks for a discount, but know where you stand.
At the end of the day, your rental’s price is a blend of market data, its individual charm, and a pinch of gut feeling. Trust the process, and remember, every lease signed is another lesson learned.
How to find rental comps OFF MARKET
Here’s a question: Why chase after what everyone else is chasing when there’s a treasure trove hidden in plain sight?
Finding rentals off the market is like that unexpected song on an album you didn’t think you’d like, but it becomes your favorite.
Here’s how to find that track:
1. Driving for Dollars:
Have you tried the Deal Machine app? As you’re cruising around, keep your eyes peeled for those properties that seem… well, forgotten. Distressed facade? Overgrown lawn? Absentee vibes? Whip out the app and send the owner a postcard in a snap. Want to know more? Check out our in-depth review of Deal Machine.
2. FSBOs – Your Golden Ticket:
Zillow and Craigslist are more than just digital window shopping. Many owners list properties themselves to dodge agent fees. Your pitch? Ease and speed. No fuss, no multiple viewings, just a smooth transaction.
3. Absentee Owners Galore: PropStream’s your secret weapon here. It’s like having a compass in a treasure hunt. Historically, absentee owner lists see the most off-market sales. Why? Life changes, circumstances shift. Be there when they’re ready to sell.
NOTE: here’s an inside look at Propstream and the price
4. Skip, Trace, Dial:
Grab a skip tracing software, fetch some numbers, and let your fingers do the talking. And remember, in today’s digital age, shoot over a text too. Oh, and if they’re absentee owners? Mail the mailing address, not the property one. Trust us on this.
Check out our list of top skiptracing tools for investors
5. CRM is Your Wingman:
Consider tools like InvestorFuse. Off-market deals are a marathon, not a sprint. Initial contact is just the starting gun. Stay on their radar, nurture that relationship. One call rarely seals the deal.
NOTE: Here’s a list of our top CRMs for investors this year.
Remember, off-market doesn’t mean off-limits. With the right tools and persistence, you’re not just finding properties; you’re discovering opportunities.
6. Have an online presence:
If you’re up marketing for deals… you might as well throw up a website of your own for credibility’s sake. These days… people are SKEPTICAL of things like: I’ll buy your house. Have a legitimate-looking site (cause you a ARE legitimate buyer). It costs pennies at Investor Carrot and you’ll have one in 24 hours. Or alternatively, check out our list of website builders for real estate.
Wrapping Up The Rental Comp Journey
And there you have it, the ins and outs, the nooks and crannies of running rental comps. From the ever-reliable MLS to the art of harnessing your own knowledge, and venturing into the tantalizing world of off-market deals – we’ve covered quite the ground, haven’t we?
But remember, in the fast-paced realm of real estate, knowledge isn’t just power; it’s profit. The tools, strategies, and tips we’ve delved into are just the starting blocks. The real magic happens when you meld these with your unique vision, tenacity, and a pinch of instinct.
So, as you embark on your investment journey, equipped with this newfound wisdom, keep your eyes wide, ears sharper, and mind ever curious. Because in the vast landscape of properties, it’s not just about finding a house; it’s about recognizing a home’s potential. Here’s to finding that perfect comp, making informed decisions, and above all, investing with confidence. Cheers to your success!