Too often we hear how Zillow’s “Rent Zestimate” has recommended a rental rate that is hundreds of dollars over what the current market bears or even hundreds of dollars below.
Per Zillow’s website, they can only calculate based on certain data that may not be readily available from public databases along with properties ONLY listed on Zillow.
As of 2020, Zillow now charges a fee for management companies to advertise on their site. Due to the current market, paying extra for advertising is not needed as there are a multitude of free rental sites as well as the Multiple Listing Service for Real Estate Agents.
Zillow markets homes that are long term vacant properties as well as short term fully furnished. This can have a drastic impact on their Zestimate as they are not comparing like for like.
With Zillow being Nationwide, they also do not take into account current local trends.
Before believing numbers recommended on Zillow, please be sure to read their fine print.
Zillow notes:
“Note: This guide is for informational purposes only. Zillow, Inc. does not make any guarantees about the sufficiency of the information in or linked to from this guide, or that it’s compliant with current, applicable or local laws. Landlord-tenant laws change rapidly and may be regulated at the federal, state and local levels. This resource is not a substitute for the advice or service of an attorney; you should not rely on this resource for any purpose without consulting with a licensed attorney in your jurisdiction. We encourage renters and landlords to supplement Zillow’s information by doing additional research such as:
Talk to a local real estate agent, or property manager that specializes in rentals
Compare rental to other nearby apartment and homes for rent on Zillow
Visit the rental (whenever possible)”
Before you determine an accurate rental rate for your investment home, always verify with an expert in the actual location of your investment home.
