Whether you want to see if you are currently charging the correct amount for rent, you have a tenant moving out, or analyzing a property to purchase, determining the market rent is critical.
Since multi-family properties are priced based on income, charging the correct rent is crucial for the lifecycle of the property. Since Portland & Oregon has a cap on how much you can increase rents per year, making sure you are keeping up on current rents, is crucial. The question is, how do you accurately determine the market rent for your property.
When I am looking to find the market rent for a property, my first stop is rentometer.com. This is the first place I go because it will give me a general idea as to what the rent will be. Rentometer does not take into account the condition of the property so it is not going to be 100% accurate Once I get the information from rentometer and if I am looking to get a more accurate rate, I will compare the subject property to other rental listings in the area listed on Facebook Marketplace, Zillow, Zumper, Trulia, and Apartments.com. The first thing I will do is filter the criteria on the size of the property (bedroom/bathroom count). Once I have those properties, I want to find other properties that are similar condition as mine. You will want to make sure that you are looking at properties as close as possible to the subject property as possible. Expand your geographic radius until you find 5-8 similar properties which are the same layout and in a similar condition. Once I have all that information I can come up with the current market rent. This will take some time to look at all the listings in the area but totally worth it. Coming up with rental rates is more of an art than a science. You will be making your best-educated guess based on the information you have at the time.
If you are looking for a second opinion, you can ask your property manager or Real Estate Agent for their professional opinion.
I like to keep my rentals slightly under market rent (unless I am going to be selling or refinancing it within the next year) in order to get as many applications as possible and to convince good tenants to stay long-term. Also, keep in mind that if your property is in Portland, you must give 90 days’ notice of a rent increase if you are going to raise the rent 5%-9.9% in a 12 month period.