If you decide to rent out your house instead of sell it, the first thing you’ll do is size up how much you can get. The big question you need to answer is: can you cover the mortgage, property taxes and routine expenses? Until now, you’ve had two modes of scouting the going rates for rentals like your house. You could try to piece together comparable rental rates from local classifieds, Craigslist and similar sources. Or you could interview property managers and see what they recommend.
Now there’s a new source of rent data: Zillow. Zillow started listing rentals at the end of 2009, and now has, it says, about 300,000 apartments and houses for rent. With all that data, it just took a few algorithims and some economist bandwidth to whip up a model for estimating how much your would fetch from willing and able renters.
Zillow lets you search rentals based on the same type of criteria already offered through ForSaleByOwner.com , Realtor.com and other listing services: number of bedrooms, square footage, and so on.
For consumers, the rent benchmark is useful. But if you are actively trying to sell, and you are thinking of getting an appraisal anyway to set the correct sale price, ask the appraiser to include comparable rentals. That will give you the best possible market data and will be more authoritative when negotiating with potential tenants. If the rent must cover the carrying costs of the house, the appraisal with rental data is the way to go.
Image courtesy of Morguefile contributor Jade.
