How To Get Reliable Rental Market Data

On today’s show we are taking a look at data sources when it comes to understanding the market.

We know there is a gap between asking rents and contracted rents on average. Sometimes you will see a listing as a tenant and the landlord has listed the rent. Some tenants will treat the rent as a fixed number and either pay the asking rent or look elsewhere.

But then a subset of tenants will make a rental offer which might be different than the asking rent. The result is a negotiation.

The rental price might not change in that negotiation. The savvy landlord wants to preserve the value. They don’t want to change the monthly rent. So if they give a discount, they would prefer to offer a rent concession in virtually any other form.

It could be a month of free rent, as in 13 months for the price of 12. They’re still signing a 12 month lease and maybe offering the second or third month of the lease term as the free month. That way, when they compile their numbers for the end of the year, the monthly numbers look stronger even in the presence of a rent concession.

If you’re looking to make an investment, where do you go for a reliable source of rental comp numbers?

The asking rents that are publicly listed are just that, asking rents. That’s not indicative of the actual contracted rent.

We can find all kinds of market data on the internet. But before you look at that data for a particular area you need to ask yourself some important questions.

-------------

Host: Victor Menasce

email: [email protected]