How to Find Rental Rates by Zip Code

As a real estate investor, do you wonder about looking for rental rates by zip code? Read on to learn how to find rent rates by zip code.

Table of Contents

1. Why Is It Important to Set the Right Rental Rate for Your Investment Property?
2. 9 Factors That Affect the Rental Rate
3. What’s the Best Way to Find Rental Rates by Zip Code?
4. 10 Top Markets for Rental Property Investing

Investing in rental properties requires more than just access to adequate funding and location. A successful rental property is appropriately priced to be competitive in the neighborhood and zip code it is in. 

There is a trick to setting the right rent rates so you can optimize your monthly rental income in whatever zip code the rental house is in. You need to know how to use other similar properties in the area as your point of reference. 

The great thing about real estate investing in the digital age is it is now easy to compare rental rates in any market. You can easily use zip codes to find rent rates to compare your subject property’s rates. 

In this article, we will show you how to find a good rental house using a zip code with real estate website Mashvisor. We will also discuss how you can maximize your rental income based on the different factors that affect rental rates. 

If you’re an investor and you’re seriously considering investing in rental properties, long term or short term, you will want to stick around until the end. 

Why Is It Important to Set the Right Rental Rate for Your Investment Property?

First things first. Why is setting the right rental rates important in rental property investment?

A lot of investors get into rental property investing thinking that all you need is the right location and access to capital. While the two are highly important factors in a rental investment’s success, there’s more to it.

 A successful rental property in any area or zip code is also largely dependent on the rent rates set by the owner. Below are a few of the main reasons why setting the right rent rates by zip code can make or break your rental property business:

It Helps You Attract Tenants

As a rental property owner, your goal is to have a high occupancy rate regardless of your rental strategy.

Setting market-appropriate rental rates by zip code will help your rental house become competitive and attract tenants and guests in any area or zip code of your choice. 

If you set rates that are above the zip code’s market rates, potential tenants and guests will overlook your property and move on to a similar yet more affordable property. That is something you would want to avoid. 

On the other hand, setting rates that are lower than other similar rental properties in the same zip code may get you several inquiries and bookings. The downside to this is you’ll end up with a very low cash on cash return on your rental compared to other nearby properties.

If you want to get into the long term rental business, you want your property to be occupied by a good tenant. That is one thing almost every landlord prays for: to find a responsible tenant. 

The right rental rates that are appropriate to the zip code you’re in will make your property attractive to the right people. 

It Helps You Get Paid on Time

Speaking of the right people, if you find the right tenant or guest for your rental property, the chances of payment delinquencies are low. 

According to a survey conducted by TransUnion, 84% of landlords cited payment problems as their top concern. 

To avoid such a situation, consider the average income of the people living in the area. Set your rental rates to target folks within the same income range, so you minimize the chances of dealing with late payments. 

It Helps You Take Care of Your Mortgage and Other Related Costs

The right rental rate will help you cover all the monthly expenses related to the rental property. The expenses include maintenance costs and mortgage payments. 

Keep in mind that your rental property is an investment. If you’re not making enough rental income to cover all your costs and leave you with a positive cash flow, then your rental rates are too low. 

It Helps You Optimize Your Rental Income

One of the reasons why real estate investors opt to invest in rental property is that it can be financially rewarding. With the right strategies, an investor can build both wealth and equity with just a few rental properties.

To do it, you must set the right rates so your property is competitive in the zip code it is in. With the right rates, you can earn as much as 6% of your monthly rental income as profit. 

9 Factors That Affect the Rental Rates by Zip Code

When it comes to figuring out how much to charge for rent rates by zip code, you need to take into account several factors that affect rental rates in any zip code and area. While each market comes with its own specific qualities and features that bring real estate prices up or down, certain factors are universal and apply to all cities, neighborhoods, and zip codes. 

1. Location

Perhaps the main factor that will determine the rental rates in an area is the property’s location. The success of a real estate investment, especially rental property investing, depends largely on where an investment property is located. 

The location is one of the top considerations in rental property investing. It determines how profitable a prospective rental property is. When you’re evaluating a location, you need to be on the lookout for the following:

• Thriving economy
• Growing job market
• Healthy tourism industry
• Neighborhood safety and security
• Proximity to public amenities
• Good school district
• Access to public transportation
• Low property taxes
• Favorable rental regulations

2. Number of Bedrooms

Another factor that will determine your rental rates is the number of bedrooms in your subject property. It is one of the very first things potential tenants look at when they’re going through the MLS. 

3. Number of Bathrooms

The other thing folks look for other than the number of bedrooms is how many bathrooms there are in a certain house. Historically, the number of bedrooms and bathrooms are two of the things that sway people into buying a house more than anything else. All the other considerations matter but a lot of decisions are made based on the said two things. 

4. Year Constructed

A property’s potential rental rate is also determined by how long it’s been standing. In most cases, newly constructed houses command higher rental rates as they are brand new and compliant with updated building inspection standards. That’s not to take away from older properties for as long as they are in excellent condition. 

5. Square Footage

At the height of the pandemic, when shelters-in-place were strictly observed, a lot of urban dwellers moved out into the suburbs and rural areas to look for more space. A property’s rental rates can be set according to how big the lot and floor areas are. The rule of thumb is the bigger they are, the higher the rates. 

6. Parking

Provision for parking is another thing that can bump up (or take away) from your rental rates. It especially applies to urban areas, where most rental properties are in multi-family buildings and condos. A dedicated parking slot for your rental home makes potential tenants and guests take notice of your listing. 

7. Public Amenities

To set the right rental rates in your zip code, you will also need to factor in proximity to public amenities. High accessibility to public amenities, such as restaurants, shopping centers, school districts, parks, libraries, and other attractions, can boost your rental rates, which ultimately raises your rental income. 

Another thing to consider is accessibility to public transportation, which also helps significantly bring up the rent rates of a property in any zip code. So, be on the lookout for these things, too. 

8. Pets Allowed

Let’s face it; not all rental property owners allow pets on their properties. However, there is a growing number of long term and short term rental properties that already allow pets on the premises. The property owners acknowledge that pets are also an important part of a lot of people’s families, and if they want to broaden their market, they should allow pets. 

You will find such types of properties in any zip code. The number will just vary, but it is safe to say those property owners that allow pets on-site appeal to a larger market compared to those that don’t. The added perk can be a great pull for animal lovers who are willing to pay a little more than usual just to have their fur babies with them.

The upside of allowing pets on your property is that pet owners are highly likely to be very responsible tenants and guests. 

9. Overall Condition of the Property

Lastly, the property’s overall condition will significantly affect your rental rates. People will want to know everything there is to know about the property. As a rental property investor, you need to get historical with the property. Find out all of its issues, like repairs and updates, and what its current condition is. 

At the end of the day, even if you own a three-bedroom, two-bathroom house located in the heart of the city, if it looks worn out and dilapidated, you cannot set high rent rates for the house. It is why a lot of landlords and property managers work hard to keep rental properties in tip-top shape to make sure they’re habitable and up to building code standards.

What’s the Best Way to Find Rental Rates by Zip Code?

The question at this point is how do you set the right rent rates by zip code for your rental property? Easy. With the help of rental comps.

Rental comps are comparable properties that have nearly the same features as your subject property. For instance, your subject property is a four-bedroom, three-bathroom house in an average neighborhood belonging to a particular zip code. All you need to do is search the area for other four-bedroom, three-bathroom rental properties and find out what their rates are. 

Once you identify which properties are very similar to yours, take note of how much each one is charging for rent. It applies to both long term and short term rentals. 

When combing through a zip code for comparable properties, you can do it the conventional way and drive around town. Or, you can simply utilize technology and make it work for you. 

You can log on to a real estate platform that specializes in rental property investments. However, not all real estate websites and apps are created equal. Some won’t allow you to search for properties using zip codes. So, where should you turn to?

Mashvisor: The Best Way to Find Rental Properties by Zip Code

One of the platforms that allow you to search for properties using a zip code is Mashvisor. Mashvisor is a real estate website that has helped thousands of rental property investors find the most ideal properties that align with their investment goals. 

As a website, Mashvisor gives users access to an extensive database that covers almost every zip code imaginable across all 50 states. Its database is regularly updated to give users greater confidence in using the platform, especially if they’re after high-quality data that will give them the most accurate results. 

Mashvisor’s property search tool lets you find investment properties in any location of your choice. Once you’re on the home page, you can simply enter whichever location you have in mind using a specific address, city, neighborhood, or even just a zip code. 

Mashvisor’s Real Estate Heatmap

Once you’ve entered the zip code, it will automatically take you to a map of the location that shows active listings in the area. You can customize your search by using the real estate heatmap function in the upper left corner of the map. Depending on what you’re looking for, you can set the filters to the following:

• Long Term Rental Income
• Short Term Rental Income
• Long Term Rental Cash on Cash Return
• Short Term Rental Cash on Cash Return
• Listing Price
• Short Term Rental Occupancy Rate

To look for rental rates in the zip code you’re considering, simply set the filter to long term or short term rental income to see the data. The heatmap will then show you a color-coded map that points out which areas are doing really well (greens), which ones are bad neighborhoods (reds), and everything in between.

You may also simply hover over any pin on the map to get an overview of what the property can offer. Or, you can just simply click on any pin to get the full details on the property. 

Since the process is now a lot less complicated, you can easily set the appropriate rent rates by zip code using Mashvisor as your primary tool. 

To start finding average rental rates by zip code using Mashvisor, click here.

10 Top Markets for Rental Property Investing

Now that we’ve discussed how to find profitable rental properties and set rental rates by zip code, it’s time to find out which zip codes or markets make for profitable investment locations for long and short term rentals. 

We combed through Mashvisor’s October 2022 data to find the most ideal locations for your investment venture. You can set rent rates by zip code which will give you a decent enough positive cash flow with these locations. That said, here are the areas that are best for rental property investment. 

5 Best Markets for Long Term Rental Properties

For the list below, we selected the locations filtered using the following criteria: 

• Each location should have a median property price of no more than $1,000,000
• Each location should have at least 100 active rental listings
• Each location should be earning at least $2,000 in average monthly rental income
• Each location should have a 2.00% minimum average cash on cash return
• The price to rent ratio should be 20 and above

Here are five of the top long term rental markets, according to Mashvisor:

1. Vero Beach, FL

• Median Property Price: $727,992
• Average Price per Square Foot: $294
• Days on Market: 91
• Number of Long Term Rental Listings: 628
• Monthly Long Term Rental Income: $2,618
• Long Term Rental Cash on Cash Return: 4.26%
• Long Term Rental Cap Rate: 4.37%
• Price to Rent Ratio: 23
• Walk Score: 78

2. Hallandale Beach, FL

• Median Property Price: $728,539
• Average Price per Square Foot: $415
• Days on Market: 92
• Number of Long Term Rental Listings: 642
• Monthly Long Term Rental Income: $2,853
• Long Term Rental Cash on Cash Return: 3.61%
• Long Term Rental Cap Rate: 3.72%
• Price to Rent Ratio: 21
• Walk Score: 79

3. Stuart, FL

• Median Property Price: $719,961
• Average Price per Square Foot: $361
• Days on Market: 68
• Number of Long Term Rental Listings: 376
• Monthly Long Term Rental Income: $2,931
• Long Term Rental Cash on Cash Return: 3.57%
• Long Term Rental Cap Rate: 3.62%
• Price to Rent Ratio: 20
• Walk Score: 42

4. Fountain Hills, AZ

• Median Property Price: $885,044
• Average Price per Square Foot: $359
• Days on Market: 92
• Number of Long Term Rental Listings: 122
• Monthly Long Term Rental Income: $3,161
• Long Term Rental Cash on Cash Return: 3.42%
• Long Term Rental Cap Rate: 3.46%
• Price to Rent Ratio: 23
• Walk Score: 39

5. Dania Beach, FL

• Median Property Price: $609,500
• Average Price per Square Foot: $376
• Days on Market: 63
• Number of Long Term Rental Listings: 238
• Monthly Long Term Rental Income: $2,404
• Long Term Rental Cash on Cash Return: 3.37%
• Long Term Rental Cap Rate: 3.45%
• Price to Rent Ratio: 21
• Walk Score: 86

To find the most profitable long term rental properties in any zip code of your choice, click here.

5 Best Markets for Short Term Rental Properties

According to Mashvisor’s October 2022 data, the following places are the ideal short term rental property investment locations today. We chose the locations based on the following criteria: 

• Each location should have a median property price of no more than $1,000,000
• Each location should have at least 100 active Airbnb listings
• Each location should be earning at least $2,000 in average monthly rental income
• Each location should have a 2.00% minimum average cash on cash return
• The short term rental occupancy rate should be 50% and above

Here are five of the top short term rental markets, according to Mashvisor:

1. Reading, OH

• Median Property Price: $225,180
• Average Price per Square Foot: $139
• Days on Market: 40
• Number of Short Term Rental Listings: 171
• Monthly Short Term Rental Income: $2,874
• Short Term Rental Cash on Cash Return: 7.85%
• Short Term Rental Cap Rate: 8.14%
• Short Term Rental Daily Rate: $117
• Short Term Rental Occupancy Rate: 53%
• Walk Score: 80

2. Schiller Park, IL

• Median Property Price: $280,389
• Average Price per Square Foot: $208
• Days on Market: 54
• Number of Short Term Rental Listings: 110
• Monthly Short Term Rental Income: $3,853
• Short Term Rental Cash on Cash Return: 7.85%
• Short Term Rental Cap Rate: 8.10%
• Short Term Rental Daily Rate: $155
• Short Term Rental Occupancy Rate: 59%
• Walk Score: 71

3. West Saint Paul, MN

• Median Property Price: $268,376
• Average Price per Square Foot: $169
• Days on Market: 35
• Number of Short Term Rental Listings: 320
• Monthly Short Term Rental Income: $3,367
• Short Term Rental Cash on Cash Return: 7.70%
• Short Term Rental Cap Rate: 7.86%
• Short Term Rental Daily Rate: $151
• Short Term Rental Occupancy Rate: 62%
• Walk Score: 75

4. Richmond Heights, OH

• Median Property Price: $229,130
• Average Price per Square Foot: $131
• Days on Market: 108
• Number of Short Term Rental Listings: 234
• Monthly Short Term Rental Income: $2,958
• Short Term Rental Cash on Cash Return: 7.45%
• Short Term Rental Cap Rate: 7.63%
• Short Term Rental Daily Rate: $136
• Short Term Rental Occupancy Rate: 51%
• Walk Score: 23

5. Bellwood, IL

• Median Property Price: $257,900
• Average Price per Square Foot: $198
• Days on Market: 54
• Number of Short Term Rental Listings: 152
• Monthly Short Term Rental Income: $3,677
• Short Term Rental Cash on Cash Return: 7.45%
• Short Term Rental Cap Rate: 7.69%
• Short Term Rental Daily Rate: $161
• Short Term Rental Occupancy Rate: 64%
• Walk Score: 82

To find the most profitable short term rental properties in any zip code of your choice, click here.

Wrapping It Up

To sum it up, setting the right rental rates by zip code will boost your chances of investing success. Rental property owners should know how to determine the appropriate rent rates by zip code if they want to ensure higher occupancy rates, which ultimately leads to better monthly rental income.

As an investor, you can choose among several investment options, but not all of them can optimize your investment. If you want a better return on investment, you should be willing to put in the hours and do your homework. Part of this is knowing what each market has to offer by way of rental rates. 

The good thing is that a website like Mashvisor can help you shorten the research time and guarantee highly accurate results on your investment property analysis. With useful tools such as the real estate heatmap, finding the best deals in the most profitable neighborhoods is as easy as 1-2-3. 

To get access to our real estate investment tools, sign up for a 7-day free trial of Mashvisor today, followed by 15% off for life.