patrick.net

It's now the median of the 40 closest rents advertised on Craigslist with the same number of bedrooms.

But earlier rent estimates tried to do fancy math and it just didn't work out well, so I switched to this system. Maybe you're seeing some of the old rent estimates?

If you're a subscriber to my data service ( http://patrick.net/housing/subscribe.php ) you can always see the latest actual Craigslist rents, sorted by distance from any address you choose.

If not, you can always just guess and type some other rent into the calculator to redo the calcs with that.

I'd be grateful for suggestions for improvement.

I would agree with ECBB, Patrick. I live in 90277, in a medium-sized 4/3 townhouse. Places like ours rent for $3500-$3800. The calculator suggests monthly rent as being $2300-$2500. You will likely find only smallish 3BR apartments for that much in this area.

Waitingtobuy says

Places like ours rent for $3500-$3800. The calculator suggests monthly rent as being $2300-$2500. You will likely find only smallish 3BR apartments for that much in this area.

Tax and residual after tax income! its not like your LL is a non-taxable non-profit institution..

Thomas, I dont follow what you are saying. Are you saying the rent would be after-tax income and a mortgage payment would be pre-tax? The calculator accounts for this.

Just to clarify, Im saying a place similar to ours would cost us $3500-$3800/month to rent.

3500 rent payment by you to the landlord

2300 would be the mortgage payment equivalent by landloard

Leaving $1,000 pretax profit ( what patrick may have left out)

Tax say 35% as corporation...or $350

leaving $650 as net income to the landlord

Waitingtobuy says

I would agree with ECBB, Patrick. I live in 90277, in a medium-sized 4/3 townhouse. Places like ours rent for $3500-$3800. The calculator suggests monthly rent as being $2300-$2500. You will likely find only smallish 3BR apartments for that much in this area.

I see the problem for 90277. There were not that many 4br rentals advertised there lately, so the 40 closest rentals within the last 2 months includes some places that are more than 10 miles away.

I could go to 3 months, but I guess the real problem is that there just isn't that much data in that zip code for that number of BR.

I think part of it is that often the Craigslist ads do not indicate square footage. If there's some way you can come up with reliable data for cost per square foot, that might help you.

I see the problem for 90277. There were not that many 4br rentals advertised there lately, so the 40 closest rentals within the last 2 months includes some places that are more than 10 miles away.

I could go to 3 months, but I guess the real problem is that there just isn't that much data in that zip code for that number of BR.

Thanks Patrick. I think that is one of the problems here. Lack of inventory, both for sale and for rent, means more $$$. This is true for even quality 3BRs. It would seem to interfere with the apples to apples comp of renting vs owning. Comparing 90277 to places 10 miles away means a number of problems:

1) rent drops off a cliff by moving 2-3 miles inland, more or less 10 miles. Big difference between renting in 90277 and 90278 and places like Inglewood, Lawndale, Gardena, Hawthorne, Carson, or even some parts of Torrance.

2) people will pay a premium to rent in places like Redondo, Hermosa, PV, Manhattan, and even El Segundo. This is due to the quality of the schools, city services, and location near the ocean. Otherwise, you are stuck in LAUSD and Los Angeles city pergatory, and we know what that can mean.

Owning our place is almost $800/month less than renting the same place, before taxes and insurance.

It would be nice to get square footage and adjust for that. I think the counties often have the square footage for each property. Yahoo Real Estate frequently had it somehow, and I think it was from the county.

Another trick I could use to get rents is to make a "Is your rent fair?" function, where people would enter their address and their rent and I would tell them the nearby rents -- but also, I'd be collecting their own rent as a data point!

Would that be ethical? Would people put in correct addresses and rents?

What about writing some script to the API at rentometer.com to get the median rent for a particular zip and number of bedrooms? It seems pretty accurate to me.

rentometer.com just does that "Is your rent fair?" trick to collect rents, AFAIK. Maybe I should just do that too.

I think it would be useful to print some sort of message in the cases where there's not much data -- maybe it's not a real solution, but at least it will be some indication that the numbers might be off.

As for collecting rent data, I think it's completely ethical as long as you tell people what you are doing. You could even give people the option -- let it default to letting you collect their info, but give them a way to disable that, if they want.

Makes sense to me, if you want to go through the effort, or just plug into someone else's data. I would compare the size of your universe to theirs and then make the decision.

The other thing that can swing wildly is the property tax rates by zip code. Everyone assumes it is 1.25% in CA, but our rate is closer to 1.14%, even after a large school bond issued 4 years ago. That can impact the figures. It would be good to plug into some data on this.

OK, I'll do these things:

1. extrapolate 4br rents from all the other br values, to get more data
2. if there's still not much data, give a warning
3. create an "Is your rent fair?" function with option to disable data collection
4. create an "Is your property tax fair?" function like the rental one

Seem like good functions to me. Thanks Patrick.