What does Zillow say your rental property should be renting for?
Zillow is a pretty popular site for tenants to find homes and for owners and landlords to list them. For marketing purposes, it’s a great site. For the purposes of pricing your rental home, however, you might want to use more reliable data.
A lot of rental property owners feel somewhat misled by the rental estimates they find on Zillow. These “Zestimates” have been inflated recently, and it underscores the importance of accessing good data when you’re pricing your rental home. Don’t rely only on what you find on general rental sites like Zillow and others.
What’s driving these inflated rental amounts?
We did some investigating.
Estimates and Data for Sacramento Rentals
The first problem may be faulty or incomplete data. Remember that estimates are only as good as the information that’s provided to the algorithm making the estimate. Zillow has access to very generalized numbers. It’s going to be a more macro look rather than a nuanced dissection of a local zip code or
neighborhood.
There’s also the matter of accuracy. Zillow may not have correct information about the homes that are listed on their site. That’s going to lead to potentially higher estimates. If a Zestimate says that your home could potentially rent for $2,500 a month, that could be due to the fact that they think you have more square footage than you do. Or, you’re listed as a three-bedroom when your home only has two.
Zillow's Zestimate relies heavily on publicly available data, and this means that it may not take into account certain factors that are likely to impact actual pricing.
Market Conditions and Zillow’s Estimates
Zillow also has less of an ability to factor in the current market conditions when they’re attaching rental estimates to properties. When pricing properties, seasons have an impact. The availability of inventory, too. Mortgage rates in the sales market will impact the rental market and the rents that owners are charging for their homes.
There’s less agility in a system such as Zillow, making it more difficult for them to make rental estimates with accuracy. This can lead to inflated estimates.
Pricing Your Sacramento Rental Property Accurately
