Why an asking rent isn’t the same as rental evidence
When investors talk about “the rent” for a property they’re considering, they usually mean one of two quite different things: the rent a similar property is currently listed at, or the rent similar properties have actually been let for. Those two figures are related, but they are not the same thing — and conflating them is one of the more common ways a yield calculation ends up more optimistic than reality.
What an asking rent tells you
An asking rent is what a landlord or agent is currently requesting for a comparable property. It’s a genuinely useful data point — it reflects current market conditions and gives a sense of where rents are heading — but it’s also, definitionally, unconfirmed. It hasn’t yet been tested against what a tenant is actually willing to pay. Some asking rents let quickly at the advertised figure. Others sit on the market for weeks and eventually let for less.
What rental evidence looks like
Stronger rental evidence comes from what’s actually been achieved: a rent a similar property in the same street or postcode was actually let for, ideally recently, and ideally more than once. The closer the comparable is — in location, property type, condition and size — the more weight that evidence can reasonably carry.
In practice, achieved-rent evidence for a specific street is often limited. That’s not a flaw in the analysis — it’s simply the nature of the data available. The honest response to thin evidence is to say so, not to quietly substitute a confident-sounding asking rent and treat it as equivalent.
Why the distinction matters
A yield calculated on an optimistic asking rent, rather than on grounded rental evidence, can make a marginal property look like a strong one. Over a portfolio of decisions, that gap between the assumed figure and the achievable one is where disappointing returns quietly come from — not usually from one dramatic miscalculation, but from a habit of using the more flattering number by default.
The question isn’t just “what’s the rent?” — it’s “how do we actually know that?”
This is why PropSignals labels rental figures by how they’re supported — known, calculated, estimated or unknown — rather than presenting every rent figure as though it carries the same weight. An estimated rent is still useful. It just shouldn’t be mistaken for a confirmed one.