What is a Rent Survey?
If you want to be successful as a real estate investor, you need to make sure you are maximizing the profit from your properties. A great way to do this is through a rent survey, which should be performed for any new acquisition and refreshed regularly for properties you currently own or manage.
A rent survey tells you current rents for competing properties in your market, and helps you understand occupancy rates, which amenities are attracting tenants, and where rents are heading. Studying rent comps is essential for determining the value of a property you are considering purchasing, but it’s also critical for setting rents for properties in your real estate portfolio. Some of the things that go into a rent survey include:
- Property Type - The rent you can generate will depend on whether your property is an apartment building or single-family rental property. Single-family properties usually generate higher rents in the suburbs, and multifamily buildings do better dense urban areas – mainly because there aren’t too many single-family homes in dense cities.
- Building, Unit and Neighborhood Amenities - Which amenities does your apartment offer? Your rent survey should account for property amenities, like pools and roof decks, unit amenities like granite countertops and hardwood floors, and neighborhood amenities like proximity to parks, entertainment venues, and grocery stores.
- Average Rent by Unit Type - It’s important to analyze the average rent for each unit type (Studio, 1BR, 2BR, etc.) in your market and assess the current demand for each unit type. You can easily find current rents on property websites and listing sites like Zillow or Apartments.com, but availability is something you need to monitor regularly to see which units stay on the market longer and which are leased more quickly.
- Average Lease Duration - The typical time you can expect a tenant to live in your property helps determine how much rent you can expect per tenant (akin to customer lifetime value). It also helps determine how often you will have to advertise your units and what regular unit turnover will cost you. This particular type of real estate data is a bit hard to come by, but you can analyze it if you continually survey rents and availabilities and make note of which units are advertised in competing properties and how often they are put on the market.
- Unit Count, Year Built & Square Footage - Newer properties with large units clearly command more rent than small units in older properties. It’s important to understand how your subject property competes in terms of property age and unit sizes to accurately set rents. Using a combination of unit count, year built, and square footage should tell you exactly which properties and units in the market are most comparable to your subject property.
Usually, these real estate data points and others are put in a table for side-by-side comparison and used to determine where your subject property falls relative to the competition. You should be able to use the above data to determine which properties are most competitive, and your rents should typically fall somewhere between the closest competitors directly above and directly below your subject property in terms of rent.
What are the best sources of real estate data for rent surveys?
There are a few different ways to find data for rent surveys. You can subscribe to real estate data providers, ask brokers or appraisers you are friendly with, scour listing sites, or even pose as a secret shopper to get accurate rent and concession data. We describe these approaches below:
- Subscribe to Real Estate Data Providers - You can pay (sometimes hefty) subscription fees for real estate data providers like CoStar, Axiometrics, and Yardi Matrix. If you have the money, these products are a great source of information because they allow you to filter and search for comps, analyze rent trends by market, and export data for your financial models. They can be very expensive though, so it’s probably better to ask one of your broker or appraiser friends for market data from these providers until you have the deal flow to justify a subscription.
- Ask Real Estate Brokers and Appraisers - These real estate professionals are constantly analyzing properties and determining property valuations in their markets, so they are a great source of accurate data. If you have real estate brokers and appraisers in your professional network, ask them what they think of the market rents you’re thinking of charging. They can help perform a quick gut check on your assumptions and point you in the right direction for further market research.
- Copy from Property Websites and Listing Sites - If you don’t have the budget for real estate data providers and you don’t know many brokers and appraisers, you can always rely on Google for real estate data. Property websites and listing sites will provide granular rent and availability information that you can copy and paste into spreadsheets for your comparative market analysis. This will be time consuming, but if you do it consistently every week, you can keep your rent surveys up to date for both pending acquisitions and your current real estate portfolio.
- Secret Shopping for Apartments - Some real estate data providers and investors pose as prospective tenants (or hire others to do it) to learn about the rents and concessions competing properties offer. Concessions may include things like 1-month free rent, waived application fees, free parking for a period of time, or even gift cards for ground level retail (because, of course, landlords want tenants to shop in the grocery store they also operate). The rent that is advertised on a property website can sometimes differ significantly from what is offered to a prospective tenant, and this can be a great way to get more accurate information. It’s also deceptive and a bit risky, however. In real estate, integrity is everything – you definitely don’t want to be caught lying just to get market data. Proceed with caution if you use this approach.
As you may have noticed, the drawback of all of these rent data sources is that they still require that you manually copy and paste the data into your Excel models to complete your rent survey. No one likes transcribing data or copying and pasting, but unfortunately, there’s no other way… unless you use RentSource.ai!
How Can RentSource.ai Accelerate Your Rent Surveys?
RentSource.ai was designed to pull data on rent, availability, and amenities directly into your workflow in real time. With only an address, our algorithms will scour real estate listings from several internet listing sites and simultaneously query the Google Places API to help enrich your real estate data pipeline.
In addition, RentSource.ai incorporates data on asking rents (for multifamily properties), property value (for single-family homes), year built, unit/property availability, amenities, building features, and locational amenities near your subject property. Best of all, we work with your team to query the RentSource.ai API and insert this data right where they work. Below are a few ways our clients leverage RentSource.ai to deliver data directly into their workflows:
Automate Your Apartment Rent Surveys
As you heard above, surveying market rent & availability for competing properties is clearly time-consuming. RentSource.ai can automatically pull complete listing data for you every day, and send it in JSON format directly into your underwriting models or existing software. This means real estate brokers can complete their multifamily rent surveys or single-family comparative market analyses in a fraction of the time by pulling our listing data directly into products like Excel and Salesforce.
Enrich Your Real Estate Data Pipelines
Our API can be built into your existing data pipelines and workflows to enrich your company’s real estate data. All you need is an address to source valuable property data. In addition, if you’re an analyst or underwriter in a larger company, your real estate data science and data engineering teams can use RentSource.ai to enrich internal operational and financial data with new features, enhancing deal analysis and business intelligence initiatives across your organization.
Enhance Your Property Database
Missing data means incomplete market studies and manual work. RentSource.ai can fill in the gaps to build the robust real estate database you've always dreamed of. Our API can bolster your internal real estate database with features and data that are difficult to find anywhere else, and our engineering team will work with you to ensure a smooth integration.
Real Estate Data for Any Market
Everyone hates copying and pasting real estate data. While there are many paid and free sources for real estate data, RentSource.ai is unique because it delivers real-time rent, availability & property data directly into your existing real estate technology products and workflows. You need data on asking rent, property value, year built, unit availability, amenities, building features, and locational amenities near your subject property to conduct an effective rent survey, and RentSource.ai can provide all of the above. Our team will work with you to ensure you don’t have to log into another product, scour the internet, or copy and paste data to get your work done. Check out the resources below to learn more about how RentSource.ai can accelerate your real estate workflows.
Learn More About How RentSource.ai can Automate your Rent Surveys
RentSource.ai can add real-time rent, availability & property data to your real estate technology products and market studies. With only an address, RentSource.ai will scour real estate listings from several internet listing sites and query the Google Places API to help enrich real estate data pipelines. It includes data on asking rent, property value, year built, unit availability, amenities, building features, and locational amenities near your subject property.
Learn more about us from the resources below:
· More about RentSource.ai: Product Page
· Why we decided to launch HelloData.ai: The Launch
· LinkedIn company page: https://www.linkedin.com/company/hellodata-ai/
