Determining Market Rent

[BJ Grove]

Hey, I'm working on underwriting. My biggest hangup is figuring out the market rents. What do yall use or how do you figure the numbers? I have been just looking up going rates in the area, but theres such a discrepancy of about $400-$600. Im assuming thats based on the class. Whats the best way to determine a safe number based on rents I find online? 

[Joe Hammel]

Finding rent comps is a little harder than sale comps (obviously the reason you're asking the question) sale comps are easy because 95%+ of transactions happen on the MLS vs leases it's probably less than 50% are on MLS. So the best way we've structured rent comps is to form a picture and interpret. Use: MLS, Zillow, Realtor, Apartments, FB, rentometer, etc. See anything that's sold and anything that's listed active. If it's a sold comp, how nice is it? How long did it take to rent? Etc. Form a big picture and think "my in better than that, so i can probably get X"

That's really the best you can do. Talking to a fluent Realtor or PM is the next best thing because once you know a market, you really don't need comps because we know what they go for.

I'm sure that's not as concrete as might want...but hopefully some validation that you're probably already doing it correctly and just try to be decisive and realistic with interpretation