Multifamily- How do I estimate rent?

Question

I found a quadruplex with 8 bed 8 bath, so each unit is 2 bed 2 bath. I found it on the MLS and it said that estimate rent is $1000, but on the BP rental estimator it estimated $2175 at a low confidence level. Hypothetically does this mean, the whole property will rent for $1000-2000 per month, so each unit is $500? OR does this mean each unit is $1000-2000 per month so total rental per month is 4X what it says on BP or on the MLS? Just want some clarification, so I do the math correctly. Thank you!

Sergey A. Petrov · Answer

Don’t trust the MLS data - this is what the seller and their agent think they want you to know. The automated calculators are a decent base line. Check zillow, apartments.com, craigslist, your other favorite apartment rental websites, etc for actual rates on comparable units in the area. Doesn’t get any more accurate than that!

Ruchit Patel · Answer

If it's local, you can literally talk to people around, if it's out of state, you can call local agents to get more confidence in your estimate.

For out-of-state investment, way more diligence, and a trustworthy team will be required. Is it the case?

Elisa Sacchetti · Answer

Thank you!

Alex Evans · Answer

Hey @Elisa Sacchetti

Rentometer, apartments.com, and Zillow are all great places to look at comps. Here in Memphis, we use our own comps as well as the websites Mentioned to try and make sure we are at a good solid rent!

You can try and contact some property managers in the area as well to see if they would be willing to help you!

Kimothy Bynum · Answer

try rentometer. Or go on apartments.com and look at what similar apartments are renting for in the area.

Dan DiFilippo · Answer

@Elisa Sacchetti are you an agent?  I presume you either are one or have one, considering you found this on the MLS.  If you are an agent, you should know how to estimate rents.  If you have an agent, you should ask them.  If you neither are, nor have an agent, you need to explain how you found something on the MLS.

Kevin Manafi · Answer

Hi @Elisa Sacchetti, there are a few ways to go about estimating rents accurately. Firstly, I'd recommend asking your Realtor if you have one as they can pull the most accurate rental comps from the MLS. If that's not an option for you, then the second best option is what others have suggested above--use sites like Rent-o-meter, Zillow, Hotpads.com, Trulia, Apartments.com, RentNJ, Craigslist, etc. to see in real-time what other landlords around you are renting for. This will be your actual competition when it comes time to rent your place, so it's helpful info to establish a baseline for what you can set your rent at.

Wale Lawal · Answer

@Elisa Sacchetti

Check Zillow, Apartments.com, Rentometer.com, and other websites to see find out what similar units are renting for in that area.

Get in touch with a local agent who has better understanding of local market.

A local Investor-Agent can help shorten your learning curve and save you a lot of headaches as they tend to understand the market better.

Good Luck!

Nathan Gesner · Answer

Search Zillow, Apartments.com, Realtor.com, and other websites to see what comparable units are renting for. When someone / something tells you rent should be $XXX, you need to do your homework and verify that.

Multifamily- How do I estimate rent?

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