The following rent data was generated on Rentometer on April 7, 2020.
By Michael Lapsley - President of Rentometer
We were presented with an interesting question by one of our customers:
“My two-bedroom house in Las Vegas is rented for $1,350, yet Rentometer says the average rent near that address is $972 – why is Rentometer’s rent so low?”
At the risk of sounding like a total numbers geek - "I love these questions!”
Subject Property
The subject property is a 1,052 s.f., 2BR/2Ba house in Las Vegas. Looking at the initial analysis, the customer was correct – the average rent in that area for a 2-BR is $972, and the median is $950.
The customer had the Rentometer filters set as follows: MaxAge set to 12-months (no listings older than 12-months); Building Type set to “All”; and, radius set to “Auto” (“Auto” radius is always the best starting point).
Using Filters
So, knowing that this is a 2-BR house, the first thing to do is to change the “Building Type” filter to “House/Duplex,” which will exclude any apartment/condo listings. Leaving the other filters as is, the average rent is $1,054, and the median is $998.
The next adjustment was to change the MaxAge filter to 3-months (no listings over 3-months old). This provides insight into the newest listings and the most recent rent trends.
Now, the adjusted filters are: MaxAge set to 3-months; Building Type set to “House”; and, radius set to “Auto.” The result with these revised filters is average rent of $1,189 and a median rent of $1,147 – still closer to the expectations of our customer.
Determining Average Rents
The next step in the process was to look across the city of Las Vegas and determine the average rent for a 2BR house; and, enhancing the analysis by including the rent per s.f. and segmenting for # of bathrooms. So using our internal systems, I was able to isolate all 2BR House listings, in the last 90 days and came up with the following results:
|
Baths |
Avg. Price |
AvgSize |
$ / s.f. |
|
1.0ba/1.5ba |
$1,052 |
971 |
$1.09 |
|
2.0ba/2.5ba |
$1,395 |
1,254 |
$1.14 |
Our customers' property does compare well with the average rent for a 2BR/2Ba house in Las Vegas with an average rent of $1,395. Looking more closely, our customer is doing even better than the city average on a $ per s.f. basis – the city average is $1.14 and our customer is receiving $1.28.
Circumstances will vary from property to property and city to city, so getting a perfect apples to apple comparison can be difficult.
Be Realistic
However, we were able to get closer to a realistic comparison by:
- Adjusting our analysis filters (Building Type and MaxAge);
- Normalize the rent across “$ / s.f.”;
- Segment by floor plan (BR/Ba)
By doing this, we were better able to better quantify the premium for this unit (about 12%) and isolate the potential value attributable to other variables – for example, desirable unit and location, newer building and amenities, and superior management.
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This article was written by the Rentometer Content Team. The Rentometer Blog features fresh takes and insights on rental housing topics, services, and technology. If you liked this article, subscribe to Rentometer's email newsletter to stay up-to-date on the latest trends in rental housing.