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Updated almost 8 years ago on . Most recent reply
Best way to calculate Market Rent Level?
Hello all,
I have a unit that will be up for lease renewal in the next month or so. In preparation for that, I have been keeping an eye on other properties in my general are. I have a duplex, the unit is a 3/2, so I've been keeping an eye on other apartments/SFH/multiunits within about 1 mile over the last 3-4 months. Each week I look at both craigslist and hotpads to put each rental ad's info onto a spreadsheet for easy analysis. I track things such as date, rent, deposit, sqare footage, number of bed/baths, address, etc. At this point I have 28 data points.
Based on price per square foot, after averaging the properties around me, my spread sheet is telling me I should raise rents by about $35 from $1200. HOWEVER, when I run the property address through Rentometer.com, I get that my rent should increase by $150-200, to $1400. Zillow.com lists a rent for that unit at $1295.
So here's my question...Which do I go with? How do you calculate your market rents? My gut tells me go with the spreadsheet and historical data over the last 3-4 months. $35 seems reasonable. I don't think it would be best practices to increase rents that much ($100-200) anyway.
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If the unit is still tenanted I would do a $35 dollar increase for another year lease or $50 if they want to stay month to month.