Real estate is often cited as the best way to become a millionaire. It’s stable, constantly appreciating, and relatively liquid. Additionally, it has the potential to generate monthly cash flow as rental rates appreciate each year. As a full-time property manager with over 500 units in my portfolio, I know a thing or two about the benefits of real estate.
However, I also know how time management can be a struggle, especially when owners and tenants are calling me all day. That’s why it’s critical to automate as many processes as possible. Personally, I love technology, and one of the tools in my arsenal is Rentometer.
If you’re a real estate professional, you know the struggles of setting a market rent. First, you have to pull up public listing sites like Zillow, Trulia, Hotpads, and Craigslist. Then, you have to find comparable properties for rent to determine what you think your house is worth. Finally, you release the unit to market and adjust the price according to the response.
But what if there are no current rental listings to which you can compare your property? Once a home is rented, the listing often comes down, thereby reducing the public information available to you. As a result, it’s much harder for you to price a unit because you have nothing else to compare it to.
Or, what happens if you’re a new investor or manager? By overpricing a unit, you run the risk of the unit sitting longer, thereby increasing your vacancy cost. On the other hand, if you underprice a unit, you risk leaving money on the table. So, you need to make sure your market rate is accurate.
While this sounds simple, it takes time, and this is your most valuable commodity. I automate as much as possible, and in my search for a way to streamline my process for setting rental rates, I stumbled upon Rentometer. I’m always skeptical of anything that uses an algorithm (which is why I hate Zillow’s Zestimate), but I figured I’d give Rentometer a shot.
After setting market rents for 500 units each year, you could say I’m a local expert on the topic. To test Rentometer’s estimates, I entered 10 different units that I manage into the system. I was pleasantly surprised to find that the results came within 10% of my own market rates. Of course, no product can claim to be perfect, but I thought it was close enough to include in my daily cadence.
Not only does the product help me save time, but it also gives me a leg to stand on when a renter argues with me about their rent being too high. Humans inherently trust visual queues and showing a skeptical tenant something that validates my argument that market rents have gone up is tremendously valuable.
In addition to being a great tool for professionals, it’s also a valuable resource for tenants. Every city has a landlord that’s notorious for asking way too much for a unit, and you don’t want to fall prey to that trap, especially if you can get a better deal somewhere else. So whether you are new to the area or just want to know if a home is accurately valued, head to Rentometer.
As a property manager, I’ve seen my share of tools, and many are just gimmicks. But I can say with confidence that Rentometer is one of the best ways to set market rents, and saves me valuable time that I can put toward growing my business.
About the Author: Andrew Helling is a property manager and founder of REthority.com, an online resource for real estate professionals and their clients.
Would you like to give a personal testimonial about your experience with Rentometer? Email [email protected].