Rent comps are recently leased units similar to yours, used as evidence for the rent your own unit can command. They are the rental version of the sales comps an agent pulls before listing a house: instead of asking what nearby homes sold for, you ask what nearby units rented for, and you adjust for the differences.
In practice
Say you own a 2-bed, 1-bath unit at 1,000 square feet and you want to know what to charge at renewal. You find four comparable units leased in the last 60 days within roughly a mile: $1,500, $1,575, $1,620, and $1,450. The raw average is $1,536. But comps are never identical, so you adjust. Two of them had in-unit laundry and yours does not, so you knock $40 off each of those. One was 1,150 square feet, larger than yours, so you trim another $35 off that one. After adjustments your four data points land near $1,475, $1,535, $1,545, and $1,450, and the supported number for your unit is roughly $1,500. You did not pick the highest comp and hope. You built a range and landed inside it.
The discipline is matching on what a tenant actually pays for: beds, baths, square footage, condition, parking, laundry, and distance. A unit ten miles away or leased eighteen months ago is not a comp, it is a guess.
Why it matters to a small landlord
Rent comps decide two of your most expensive numbers. Set the renewal too high and a good tenant leaves, which is rarely a win once you count the vacancy, the make-ready, and the leasing time. Set it too low and you donate the gap every month for a year. Before you buy, comps are also the spine of any honest underwriting: the rent line in your projection should trace back to leased units, not to the seller's wish. For setting the number at renewal, see how much to raise rent, and for sourcing the comps themselves, how to find rent comps before you buy.
Related terms
Rent comps are the income-side cousin of a comparative market analysis, which estimates sale value the same way. The rent figure they support feeds straight into your pro forma, and the realism of that projection depends on pairing it with an honest vacancy rate, since a unit priced above its comps sits empty longer. Comps tell you the ceiling. The market enforces it.