Rent comparables are an excellent tool for learning about similar properties in your area and how to price your rental. When you list your home on Apartments.com, a rent comparables report is just one of the many tools available to help you manage your property. Find out how to leverage rent comp reports, from creating to navigating them, to make confident rental decisions.
What Are Rent Comparables?
Rent comparables, or rent comps, evaluate properties located in the same area that are similar in size, number of bedrooms, bathrooms, and amenities. They help you determine a fair market price and guide your management strategies for your rental property.
How to Generate a Rent Comp Report on Apartments.com
Navigate to the Reports Dashboard by selecting “Reports” on the left navigation menu. Rent comp report is at the top under “Advertising and Comparables.” Choose “Create Report” to get started.
Watch the video on how to create rent comp reports on Apartments.com down below or on YouTube.
How to Read Rent Comps on Apartments.com
Rent comp reports contain a lot of information, so understanding each metric and knowing how to leverage that information is key to using rent comp reports effectively.
Read the rent comparables summary
Once you scroll down past the cover page, you’ll reach the rent comparables summary. At the top of the page, key information is highlighted, including the number of properties, average rent, average rent per square foot, and average days on market. Below that is a map showing where your property and each of the comparable properties are located.
The report breaks down how your property compares to the similar properties across four metrics: rent, rent per square foot, bed/bath combo, and square footage. The scale calls out low, average, and high values, so you can instantly see whether you’re priced below, above, or near the market rate.
Explore the rent comps for your rental
Quickly compare your property details to similar properties with the basic information table. It lists:
- Address
- Property type (House, townhome, condo, apartment unit)
- Number of beds and baths
- Distance from your rental
- Square footage
- Rent
- Rent per square foot
- Walk score
- School rating
- Days on market
This allows you to understand your competition and see how your property matches up at a high level. Under the table is a visualization of this information that shows key information.
Investigate market conditions
The market conditions section immediately tells you whether your area is a renter’s market, a balanced market, or a landlord’s market using a heat scale to show the magnitude.
Then it gives an overview for your entire market, not just the immediate area. It tells you how many properties are for rent, the average days on market, and the average rent, so you get a broader market view.
A short paragraph on pricing advantage provides a historical view of the market. This allows you to forecast how the market is performing by showing whether rents are up, down, or close to where they were at the same time last year. It also shows whether more or fewer properties are for rent, and whether properties are staying on the market for longer or shorter periods.
Finally, all of that historical information is condensed into visual graphs that make it easy to pick out key trends and changes. With a percentage increase over the past 12 months as well as a line graph, you can consume the information in the way that’s easiest for you to understand.
How to Turn a Rent Comparable Report into a Rent Price
Rent comp reports are invaluable when it comes to figuring out how much you should charge for rent. However, you need to know how to leverage that information in order to set a competitive price.
See how competitive your rent price is
On the dot line graph in the rent comparables summary, your property’s rent price is shown in relation to the rent prices of similar properties. If you are within the same range as those properties, you may not need to change your price. However, if you are too low or too high, then it might be worth adjusting your rent price.
Look at how your property compares to others
Your property’s features and size heavily impact rent prices. If you have a one-bedroom, one-bathroom rental, then you likely shouldn’t be charging as much as a property twice that size (unless there are other factors that can justify that price). Look at how your property details compare to your competitors to choose the right rent price.
Consider seasonal variations
Rental demand can fluctuate seasonally, influencing rental prices. Factor in seasonal variations when setting rental rates, adjusting prices accordingly to capitalize on peak demand periods and attracting tenants during slower seasons. See how the market has changed over the past 12 months in the market conditions section.
Additional Tips for Using Rent Comparables
While rent comparables offer valuable insights into the rental market, maximizing their use requires considering various factors. Here are some additional tips for leveraging rent comparables effectively:
Consider property conditions and amenities
While rent prices are important, they aren’t the only factor you need to consider. You should also think about your rental’s location, size, type, age, and features and amenities. For example, if you have recently renovated your property or you’re located in a neighborhood with a lot of amenities, that could justify a higher rent.
Consider how enhancements impact your rental’s value compared to similar properties in the area if you've made significant improvements or renovations. Highlighting these upgrades can justify higher rental rates.
Adjust for differences
While base rent is a crucial aspect, don't overlook other expenses that tenants may incur. Consider additional costs such as utilities, parking fees, pet fees, and amenities when comparing other rental properties to yours. If renters find these fees push them above their budget, then they are less likely to choose your place.
Stay flexible and responsive
The rental market is dynamic, and rental prices may need adjustments based on changing demand, competition, or economic conditions. Be prepared to adapt your rental pricing strategy, whether it involves periodic rent increases, promotional offers, or incentives to attract tenants.
Best Times to Use Rent Comp Reports
Part of using rent comparables effectively is knowing when they have the biggest impact. While they are always handy to have, there are times the information can be the difference between a vacancy and a signed lease.
Pricing a new listing or re-listing after a vacancy
Rent comps are useful whether you are pricing a new property or re-listing after a vacancy. Rent prices fluctuate during a tenancy, so what you originally had as a rent price might not match the current trend. When you list your property, make sure your rent price is comparable to other similar properties.
Renewals and setting a reasonable rent increase
Rent increases are necessary for landlords to keep their rental profitable and stay in line with price changes. When tenants renew, you can set a new price that is more representative of current prices. However, calculate carefully; if you raise it too high, renters may not want to renew.
If your rental has gotten few leads or inquiries
Low leads and inquiries happen for a reason. One of the first things to check is whether your rent price is too high. Rent comp reports can help you decipher this in seconds. No one wants to rent somewhere that is way out of touch with current prices.
This article was originally published on October 6, 2023 by Helen Ann Wells.
FAQs
Should I raise rent?
Raising rent every year can make sense if your rent comp report shows your unit is under market and demand supports it. Start by using comps to pin down a realistic market range based on comparable units. Then choose an increase that moves you toward that range without overshooting it. A common approach is to make small, predictable increases rather than infrequent large jumps.
How can I handle tenant turnover?
Manage tenant turnover by keeping tenants happy and the process efficient: respond quickly to maintenance, communicate consistently, and screen applicants carefully to avoid repeat issues. Use simple retention tactics, like a small renewal incentive or welcome gesture, to encourage good tenants to stay.
What is rental income?
Rental income is the money your property generates. It is most commonly rent payments plus other related income (fees, etc.). Landlords usually look at it in two useful ways:
- Gross income: total earnings before expenses
- Net rental income: what’s left after subtracting expenses
A basic gross rental income formula is: monthly rent × number of units × number of months.
What is prorated rent?
Prorated rent is a partial-month rent amount you charge when a tenant occupies the unit for only part of the month, such as moving in on the 17th. It’s typically based on the monthly rent amount and the number of days the tenant will actually be in the unit during that month.
