Average Rental Rates by Zip Code: A Comprehensive Guide for Renters and Landlords

To determine your rent price, consider local rent control laws, the rental rates of homes in your area (rental comps), the features of your home and changes in your local market. To get a quick starting point, try our free Rent Zestimate tool. To learn more about pricing your rental, check out this article

average rental rates by zip code

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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.

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.

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:

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.

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.

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.

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.

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.

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.

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.

If you want to renew your lease but the increase will be too much of a hit to your budget, you could try negotiating with your landlord. If they are receptive to negotiating, be willing to compromise. Perhaps consider a longer lease term in exchange for a smaller rent increase. If you are unable to negotiate and need to move, knowing how to find the average rent in your new city or neighborhood, along with when to get the best rental rates, will help you find a great apartment within your budget.

Breaking down the Windy City into its many zip codes, we can analyze how the average rent in Chicago has changed over the years through a different geographic metric. Firstly, the zip code in Chicago with the most expensive average rent is zip code 60603, at approximately $2,645 for November 2022. Zip code 60603 covers a series of city blocks east of the South Branch Chicago River, stretching from South Wells Street in the west to South Columbus Drive in the east, including the Art Institute of Chicago. Chicago zip code 60603 also includes the location of one of the most expensive colleges in Illinois, the School of the Art Institute of Chicago, according to BrokeScholar.

The Chicago zip code that experienced the biggest year-over-year growth, however, was not zip code 60603. Instead, it was zip code 60606, which saw its average rent rise by 19.6%, from $2,053 in November 2021 to $2,454 in November 2022. That equates to a growth in average rent of roughly a fifth in just one year. Zip code 60606 straddles the South Branch Chicago River and includes the Willis Tower and part of the neighborhood of West Loop Gate. It should be noted, however, that this same zip code experienced a massive drop in rent when the pandemic hit: From an average rent of $2,188 in November 2019, it fell by 14.6%, down to $1,869 in November 2020.

Below is a table with the 10 most expensive Chicago zip codes in terms of their average rent as of November 2022. Also included in the table are their respective year-over-year changes from November 2021 to November 2022:

Looking over the most expensive zip codes in Chicago, some definite patterns emerge. Five of the zip codes with the highest average rent in Chicago are north or northwest of the Chicago River: Zip codes 60654, 60611, 60610, 60642, and 60614. Another key pattern is that three out of the 10 most expensive zip codes cover lakefront areas of Chicago: Zip codes 60611, 60601, and 60605.

In the end, for the city as a whole, the average rent in Chicago of $1,925 (as of November 2022) is the most expensive it has ever been. The average rent in Chicago has not only recovered from the negative impacts of the pandemic. It has surpassed its historical peak of $1,723 in March 2020, the same month the pandemic would really make itself felt in the U.S. A problem arises, however, if homebuyers continue to face affordability issues, which increasing mortgage rates have raised, then rents could continue to rise higher as buyers move to renting as an alternative.

Critics, on the other hand, have argued that home-sharing platforms like Airbnb raise the cost of living for local renters. There is not much evidence to support this claim one way or the other, though a study focused on Boston found that an increase in Airbnb listings there was associated with an increase in rents. It is not difficult to see why the idea could be true more widely: By making short-term rentals easier, Airbnb could cause some landlords to switch their properties from long-term rentals, which are aimed at local residents, to short-term rentals, which are aimed at visitors. Cities and towns have a finite supply of housing, so this process would drive up rental rates over time.

This means that, in aggregate, the growth in home-sharing through Airbnb contributes to about one-fifth of the average annual increase in U.S. rents and about one-seventh of the average annual increase in U.S. housing prices. By contrast, annual zip code demographic changes and general city trends contribute about three-fourths of the total rent growth and about three-fourths of the total housing price growth.

In Q2 2020, the average price per square foot for US offices was just over $35. Retail averaged out to $18.09 / square foot, and industrial space came in at just under $8 / square foot. However, there are significant variations in average prices based on location and real estate class. Here is a summary of average commercial rates in key USA cities:

City-level price to rent ratio data provides a valuable, high level view of potential rental property investment opportunities. Once a market is selected for further analysis, the next step is to drill down and analyze price to rent ratios at a zip code or neighborhood level.

By comparing the price to rent ratio in the target market to the price to rent ratios in each zip code in the target market, an investor can zoom in on areas that might be good for owning rental property.

Zip codes within the target market that have a price to rent ratio above 8.3 may be good for rental property investment because the higher the price to rent ratio is, the more attractive an area can be for renting. On the other hand, if a zip code has a price to rent ratio lower than the target market, the area could be more attractive for home ownership versus renting.

Indiana and Westmoreland counties saw pandemic rent growth rates of 8.1%, with average rents of $1,015 and $804, respectively. Washington County saw its average rent increase 7.7% during the pandemic, up to $1,257 a month, the highest of any county in Southwestern Pennsylvania.

We continuously update this page, so keep checking back for new information. When researching average prices, paying attention to the data source and the year represented is essential because renters insurance rates may change frequently. Any data that's several years old may not be relevant anymore. While this data provides insight about the average cost of renters insurance, it isn't customized to your situation. For exact prices, you can get a renters insurance quote online or by calling 1-866-749-7436. 2ff7e9595c