Finding a New Home: Determining a Fair Rental Price

Finding a New Home: Determining a Fair Rental Price

If you're moving to a new city or a new neighborhood, it's important to know the fair market value of rentals before you sign a lease. It's great to get advice or referrals from friends and family, but all personal information should be supplemented by independent empirical research. Just because your friend says his grandma's basement apartment is a steal doesn't mean it's true. With the wealth of real estate information on the internet, there is no excuse for getting a bad deal nowadays.

Similar articles often begin by saying that fair prices are determined by personal preferences and that property might be worth more to you than someone else because of its location or amenities, etc. This is true, but personal preferences should not supplant the fair market value of a rental.

You should know how much an apartment or house is worth to the average person. More than likely, your desires aren't that different from the average renter so the price of the property should already include most of your personal preferences. Don't be fooled, obvious amenities, like gyms and parking, should be built into the fair market value of any rental.

It's the hidden amenities and costs that often determine whether a rental is a good deal or a bad deal. Things to think about are:
• Move-in and move-out fees
• Pet deposits
• Late fees
• The ability to sublet
• Cost of breaking your lease
• Windows and whether or not they will leak cold air and warm air
• Grocery store access

The most important consideration that is not built into the market value of an apartment is the sanity and responsiveness of your landlord or rental company. Beware of landlords who are either, over involved in protecting their property or under involved. Talk to previous tenants before you move in. Landlords often ask for references from potential renters, so it's not unreasonable to ask a landlord for references from past renters.

The are quite a few sites that will instantly give you a quote of the rental value of any address. Zillow is an excellent resource and City Data provides an aggregation of statistics for most large cities. Also, Rent Bits displays rental prices in easy-to-read charts. Beware of sites like Rentometer, which tend to be too general and don't provide accurate information on specific properties.

Monitor websites like Craig's List or your local real estate company's rental section to get a sense for the prices in your area. If you're willing to a little bit of research and don't rush into renting a property, you will get a fair, if not a good, deal on your new rental home!

Image: Truliavisuals on Flickr licensed under Creative Commons

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