What Is Rental Comps?
Rental comps are similar units that rented recently. Same bedroom/bath count, similar sq ft, same neighborhood. Use 3–5 comps to establish market-rent. In Atlanta, a 3-bed, 2-bath in East Lake would comp to other 3/2s in East Lake that leased in the last 90 days—$1,450, $1,475, $1,500, $1,525, $1,550. Median: $1,500. Adjust for condition and features. That's your market-rent. Don't use listing prices—use actual rented prices when available.
Rental comps are comparable rental units—similar size, features, and location—that have recently leased. They're the basis for market-rent in deal-analysis.
At a Glance
- What it is: Similar units that recently rented
- Why it matters: Foundation for market-rent
- Ideal count: 3–5 comps
- Adjust for: Condition, size, features, lease terms
- Use it for: Deal-analysis; below-market-rent identification
How It Works
What makes a comp. Same bedroom/bath count. Similar square footage (±15%). Same neighborhood or submarket. Leased within 90 days—stale comps lose relevance. Same lease terms (12-month vs. month-to-month can differ).
Where to find them. MLS (if you have access), Zillow, Rentometer, CoStar, ApartmentGuide. Local property managers and agents. Craigslist and Facebook for some markets. Actual rented prices beat listing prices—listings can be aspirational.
Adjustments. A comp with a renovated kitchen might rent for $75 more than yours with an older kitchen. Garage: +$50. No central AC: −$25. Apply adjustment-factors to get a supported market-rent for your unit.
Conservative vs. aggressive. Conservative-underwriting uses the low end of the comp range or the median. Aggressive uses the high end. For deal-analysis, lean conservative—you'd rather be pleasantly surprised than disappointed.
Real-World Example
Ava in Memphis. She analyzed a 3-bed, 2-bath, 1,350 sq ft unit in Binghampton. Found 5 rental-comps: $1,250 (1,200 sq ft, no garage), $1,275 (1,300 sq ft, garage), $1,300 (1,350 sq ft, no garage), $1,320 (1,400 sq ft, garage), $1,350 (1,350 sq ft, renovated). Subject had garage, no renovation. She applied +$25 for garage vs. non-garage comps, −$30 vs. renovated. Blended market-rent: $1,305. She used $1,300 for noi—conservative. Current tenant paid $1,100—below-market-rent. $200 upside at turnover.
Pros & Cons
- Objective basis for market-rent
- Supports conservative-underwriting
- Surfaces below-market-rent and rent-premium
- Comps can be thin in rural or unique markets
- Listing prices ≠ actual rents
- Requires judgment on adjustments
Watch Out
- Thin comps: In rural areas, use a wider radius or similar submarket. Document your logic.
- Listing vs. actual: Actual rented prices are better. Listings can sit—the final rent may be lower.
- Seasonality: Rent can vary by season. Adjust or use recent comps.
Ask an Investor
The Takeaway
Rental-comps are the foundation of market-rent. Get 3–5 similar units that rented recently. Adjust for condition and features. Use the result for deal-analysis. Don't guess—support the number.