Rentometer Review: Is It Really Accurate and Reliable?

– Hey there this is
Seth from and in this video we’re gonna talk about a website called Rentometer or Rentometer depending on how you like to pronounce it. We’re gonna talk about what this thing is and whether or not it’s
something you can rely on when you’re trying to find
rent estimates in your area. (upbeat music) So if you’re in the
rental property business there’s a good chance you’ve
come across this website or at least something
similar to it at some point when you’re trying to find
rent comps in the area of a property you’re looking at. I remember from myself
back when I first bought my first rental property, I found out about this
website pretty quickly and I thought it was pretty cool. It was free, I could just enter in a few basic pieces of information like the property’s
address, a rent amount, and then how many bedrooms there were and it would tell me whether or not the rent price that I had put in there was reasonable for that given area based on the property
that I was looking at. And I remember thinking
this thing was so helpful I had it bookmarked and I went there again and again and again for
every property that I analyzed until one day when I was
working with my realtor and he sent me a bunch of
investment properties to look at and telling me, hey this
property will rent for X amount and this other property
will rent for X amount. So I went onto to Rentometer
and I put in those addresses and those numbers and low and behold I found that his numbers were way off compared to what this
website was telling me. And I told him that and
he basically just blew off this website and said it
was totally inaccurate and not reliable. And I guess it was kinda
of hard to argue with him because when I thought about it I wasn’t actually giving
that much information to this website. It was literally just an
address, the number of bedrooms, and the rent amount and
that was pretty much it. I didn’t tell it any information about the condition of the property, the size of the property,
the parking available, the number of bathrooms,
there’s all kinds of stuff that you’re not even allowed
to put into the system and yet somehow it gives you numbers that are supposed to be reliable. So I started thinking to myself, ‘kay is this website
even good for anything, is it even worth my time to look at this or should I just be looking elsewhere? Well I think honestly, in
order to make that assessment we really have to know first of all, where is this data coming
from in the first place? And I was doing a little
of diggin’ on this, trying to figure out
if anybody had any idea where Rentometer is
getting their information. And when I was looking
at the company’s website I found really just a couple of areas where they addressed the
issue and the first one basically said that they don’t give out any specific names of their sources but they collect rental listing data and rent data from a variety of sources including bulk syndicated data, their proprietary rental data
survey, whatever that is, and user generated input
and listings of rental data. I also found another page on their site where they said, we collect
data on a daily basis from all across the country. Most of the data is listing data so it reflects asking
rent for the most part. They do have some landlords
and property owners providing actual rent data; however, that is is relatively small
compared to the listing data. So I guess this mostly leaves us with a big fat question
mark in terms of specifics; however, when they say that
they’re using listing data as the primary source
of their information, that’s essentially telling
us what landlords hope to get for rent not what they’re
actually getting for rent. And I will say I don’t
think that necessarily means the numbers are inaccurate, I think a lot of times
landlords will end up getting what they’re asking;
however, that is not always how it pans out. So it’s just worth noting,
it’s not necessarily reality but it’s probably not
that far off from reality. So when it comes down to it,
how accurate and reliable is Rentometer really? Can you really just plug in
three pieces of information and have a 100% confidence
in the numbers it gives you? Well I think the short answer is no, it’s just not that simple,
as much as I wish it was, it’s just not how the real world works. However, I do think Rentometer is a fairly decent starting point, say if you’re entering a new market and you just know nothing,
you have absolutely no idea what to expect, then I think sure, Rentometer is not a bad place to start. And considering that it’s free at least for the first
few polls that you do and then also in the speed
and convenience of it, I think those things are
definitely worth something. It’s not like you have to
just throw out the website because you don’t have all the information and it’s not a perfectly clear
picture of what’s going on. So something else that’s
also worth knowing about is this other thing called Rentometer Pro which is a paid membership to the site that gives you a few more capabilities that you wouldn’t normally have with just the free version of the site. The way it works is similar
to the free version, you start by entering in
the address, rent amount, and the number of beds
but then it lets you go a few steps further by
putting in the maximum age of the comps that are being used. So the data that’s being
polled is this dating back for the past three months,
six months, 12 months, 48 months, you can tell it
how far back you wanna go. The further back you go the
more information you’ll have but it will also be a
little bit less accurate, reliable, and relevant compared to today. For example, if you went
all the way back 48 months, that’s four years ago; a
lot of stuff can happen in a market in four years
which is worth being aware of. You can also set the search radius, so for example, if you’re
in a densely populated area like Chicago or San Francisco
or something like that then frankly you don’t have to go that far to find comps in your area. And then also the further away you go the more potential there is
for the comparable properties to be actually very very
different to the one that you’re looking at. So the closer you can stay
to your subject property the more reliable those
numbers are likely to be. The clear advantage here
of using the Pro version of the site is that you can decide what you want that to be
rather than just taking what they decide to do for you. You can also set the building type, whether you’re looking
at an apartment or condo or a house or a duplex. And when you hop over to a
Rentometer property report, you’ll find that it gives
you a lot of information which by the way most of this stuff is available elsewhere for free. However, it does sort of
bring it all into one place for every specific property for you so you don’t have to go
huntin’ all over the place to find it. I thought the most notable
things about these reports were that it shows you the current rent that’s being charged for
that particular property. However, I’ll also tell you that I did a number of searches on
properties that I own and that particular number came up blank, they didn’t have any data for it. So just because it’s
available for some properties does not mean you’re gonna see it there for all properties,
just keep that in mind. It’ll also tell you the latest sale date and the sale price and the mortgage amount and who the lender name is, stuff that could come into play and be helpful to know about. Say if you’re about to
make an offer on a property and it would be kind
of interesting to know, okay what did this person
pay for the property when they bought it and
when did they buy it and do they have any debt on the property because if they don’t that could give them some flexibility in
accepting a lower price. So that kind of data can
definitely be helpful to have when you’re combing
through this information and trying to make an
important investment decision on a particular property. Another fairly useful thing
you’ll have with a Pro account is the rent analysis tool
in addition to showing you what the rent average is in your area and how your property compares
to others in the market. It’ll also give you a lot more specifics about the comparable
properties that it’s using to compare your property to. That information includes
the distance of that property from your property, the
rent that that property is supposedly getting,
the size of the property, the price per square foot,
the number of bedrooms, the number of bathrooms,
the building type. And also it gives you
these clickable buttons where if you want to
generate a property report for any one of those comps, all you gotta do is click
that property report button and it will give you all that information on that property. So you can dig into a lot more details and see information about the comparables that are being stacked
up next to your property. There’s also this thing
called the batch analysis tool which basically allows
you to copy and paste a bunch of different properties and plug ’em all in there at once and it’ll show you a bunch of averages for each of those properties and a bunch of different scenarios with one bedroom, two
bedrooms, three bedrooms, four bedrooms, five, it’s
the same thing you can do if you were to plug in
all those properties one by one by one into Rentometer but it allows you to
just do a bunch of them with one click and then you can download a CSV file and analyze that
all further if you want to. So that’s how the batch
analysis tool works. You can also generate these neighborhood and zip code reports which are essentially very similar to their
rent analysis reports. It’s just that it’s not
focusing on a specific address, it’s looking at that zip
code or that neighborhood and showing you what the
average is in those areas. So at the end of the day, is
Rentometer still a useful tool? I think, it probably is. Just because you can’t
bet your life on it, doesn’t mean it can’t
still serve a purpose. I think it’s still something that’s probably worth
bookmarking and just checking out if and when you need a
really quick assessment on a particular property
or a particular market. However, I would not stop with this, I would definitely make sure
you get inside a property, understand the condition of it, the size, the parking available,
all the different factors that can affect a reasonable rent price. And understand that stuff
before you really zero in on the analysis of your property. Cause if you just take whatever
this site throws at you, it may be spot on but it might not be because it doesn’t have
all the information that you need to really
make that assessment. And I’ll be honest with you, I think this issue is actually
kind of a tough nut to crack. It’s one of those things that I think everybody would love to
have just be simple and easy where you literally could just plug in a few pieces of information
and know the answer. But it just doesn’t work that way. And in terms of like
how you fill in that gap and really figure out what the number is and be confident in it, what I do is I’ll either invite my potential property manager
into the property to see it with your own eyes or just
get some really good pictures and send them over to ’em and ask them, okay if you were managing
this property for me, knowing what you know
from this information, how much do you think you could get per month for rent from this one? And keep in mind this property manager probably has several other properties in the same neighborhood
so if anybody would be able to get an accurate rate on
the situation, it’s them. So that’s why I think a property manager, and a good property manager at that, is probably the best qualified person to answer that question. Or if you’re managing your own property then obviously you probably
have a fairly decent idea of what that property would generate, too. And if you don’t you can
always check out websites like Craigslist or Hotpads or ever Zillow. And by the way, Zillow
actually has their own version of Rentometer where you can
do a lot of the same stuff and check out a lot of
the same information. So there’s a lot of places you can go to get an accurate read on what
rent rates are in your area, you don’t have to use this website only. However, as a starting
point, it’s not a bad place just to get a really quick assessment of what’s going on in that market. If you are looking for some
alternatives to Rentometer, I’m gonna list ’em out in the blog post associated with this video. If you’re watching this on YouTube just check on the link in the description and you can go there and
see a lot more details with screenshots of what
the service looks like if you’re using a Pro account and a lot of other details
I just didn’t have time to mention here in this video. So thanks a lot for watching, I hope you found this helpful. Be sure to subscribe if you
wanna see more videos like this. And I’ll talk to you next time, see ya!

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