Author Topic: Market rental rates?  (Read 1702 times)

monarda

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Market rental rates?
« on: March 27, 2015, 07:48:27 PM »
I know that this topic has been discussed before in some sense, but I don't think I've seen this situation described.

We have a 2BR nice apartment for rent now. In 2012 we were seriously undercharging at $800 + utilities. We did some work on the unit and rented it after the project (in 2013) for $1000 + utilities.  At that time we asked a realtor friend how much we should be charging, and she thought in the $1000-1100 range.  So that's how we decided to rent it for $1000.  Our current tenants decided to downsize and move over from this 2BR unit to a 1BR unit in the same building. So now we had it advertised for $1100.  We have two good applicants and are continuing the screening process now. They both appear to be qualified.  I checked in with our realtor friend and just yesterday she got back in touch (after we've shown the place and started to process these two applications).  She said (and we gasped) that we should be charging $1300 to $1400.

We find it hard to believe. Maybe we'll get a second opinion, too.  But - have any of you landlords been renting in a city where the rents have increased that much in a short time?  I actually would rather have a slightly lower rent and keep a good tenant (this topic has come up in many other threads)... but when you're knowingly a bit under market, are any of you 20% under market, as this apartment appears to (maybe) be?  We're still surprised by this and haven't decided what to do.  We could come up some this summer, perhaps. We like to have our leases renew Aug 1, and these applicants know this...

Anyone ever been in this situation?



Joshua

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Re: Market rental rates?
« Reply #1 on: March 27, 2015, 08:18:30 PM »
While it is an imperfect solution, you could try running your agent's number against some online tools.

rentometer.com is pretty accurate in my area. Zillow also has a rental estimate.

GordianKnot

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Re: Market rental rates?
« Reply #2 on: March 27, 2015, 11:10:13 PM »
Check out PadMapper (http://www.padmapper.com), that should let you see what comparable places are renting for in your area.

monarda

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Re: Market rental rates?
« Reply #3 on: March 28, 2015, 08:13:54 AM »
Rentometer says even $1100 is too high (start of the red zone), so it's certainly not so accurate for this neighborhood. This unit is really nice apartment and we have no trouble renting at $1000 or $1100. 
I didn't know about padmapper. Thanks. 

My question wasn't really about the appropriate rate, but rather whether you ever were in a situation where the market rate was increasing faster than you thought- and in our case, even though we're raising the rent 10% from the previous lease, we still find ourselves (perhaps) 20% under.