As an independent landlord, you must recognize that the secret to landlord success starts with choosing a rental rate that is both lucrative for your property and competitively priced to attract suitable renters.
When purchasing an investment property, choosing the right rental fee might be difficult. While you may be tempted to be aggressive and demand a big premium for your unit in comparison to other comparable units in the region, doing so may result in long-term property vacancy. Setting your rent too cheap, on the other hand, can affect your bottom line.
Learn more about identifying the rental price sweet spot for your unit, as well as how to receive a decent rent estimate and the necessity of listing your amenities before choosing your rental fee, in the sections below.
As an independent landlord, you must recognize that the secret to landlord success starts with choosing a rental rate that is both lucrative for your property and competitively priced to attract suitable renters.
Choosing the right rental fee might be difficult. While you may be tempted to be aggressive and demand a big premium for your unit in comparison to other comparable units in the region, doing so may result in long-term property vacancy. Setting your rent too cheap, on the other hand, can affect your bottom line.
As you prepare your property for rental, the following is some insight into identifying the rental price sweet spot.
Your Property’s Market Value
A good first step in determining your monthly rental price is getting an estimate of your property’s market value. It is good to get an update on your investment’s worth because your property might have already appreciated or depreciated since you bought it.
You can o get an estimate on various real estate websites like Zillow. The most accurate assessment, however, would always come from a professional appraiser. Note that if you’re following the 1% or 2% rule, your property’s current estimated value will have a significant effect on the rent price.
Examine the Alternatives
The first thing you should do is look at comparable to see how other landlords in the area price their available rental properties. Continue your search for houses that are similar to the one you’ll be renting – the location should be equivalent (if not in the same neighborhood), the number of bedrooms and bathrooms should be comparable, and the square footage should be comparable. Don’t be hesitant to approach any “for rent” signs in your neighborhood and ask the property owner how much they’re asking, since this will give you an idea of what you might charge. While you’re at it, inquire about the lease, deposit, utilities, and everything else that may be relevant – it may help you discover a potential chance to fetch a higher price.
Online comparable is also important for establishing how to set a rent price. You’ll be able to access a comprehensive list of neighboring homes, check descriptions and images, and learn how much landlords are asking for these properties. Take careful notes, particularly when there are huge pricing differences – what are some landlords doing to fetch a higher fee that others aren’t? This will assist you in determining how to distinguish your home to make it more appealing, and eventually establish a more competitive price.
Consider What Sets You Apart
Your online and in-person research will provide you with a lot better understanding of what other landlords in your region are providing, as well as how they are leveraging this in terms of rent pricing. You must seek for possibilities in order to stand out from the throng and charge a reasonable price. Your goal is to examine what other landlords are offering, what isn’t, and where possibilities for you to take advantage may arise. If other landlords include utilities, cable, or internet in their rent, it may be a good idea to do the same so you can negotiate for a comparable price.
Consider value-added services such as home security systems, central air, snow shoveling, grass upkeep, and other amenities that might command a greater price than other property owners who do not provide similar services. Doing this will help you in maintaining property value of your estate. If your home has particular facilities such as an office space, multimedia room, on-suite baths, or numerous kitchens, they should be extensively considered when determining a rental fee. Taking advantage of these chances will not only make your house more appealing to potential tenants, but will also enable you to legitimately establish a higher rent.
Your Rental Property’s Condition
How does your rental property stack up against the other rentals in your area? Does it have a better view? Does it have hardwood flooring? Is it bigger than most apartments in the neighborhood? Are the appliances and other features of the unit updated? Is your rental older? Tenants are more willing to pay top dollar for new construction with better amenities.
Answering these questions can help you adjust your ballpark figure accordingly. It is also a great way to figure out possible renovations that boost your property’s rent price.
Timing
Real estate market conditions as well as the economy’s health can affect rental demand and, in turn, rent prices.
To determine a fair price for your unit, pay attention to what the economic climate demands. How is it affecting the real estate market? Keep tabs on the changes in your neighborhood’s housing prices and go with the flow.
If home prices and housing demand are rising, you can consider a higher price tag for your rental.
Get Property Management Assistance
A competent property management company will do a full market analysis to establish the optimum rental price for your house, ensuring that you strike the optimal balance between maximizing monthly revenue and maintaining a low vacancy rate. Our company offers extensive property marketing services to help maximize the reach of your property.
Property management requires a great amount of time and work to keep up.
While doing it yourself may make sense if you’re handy, live nearby, and don’t mind devoting few hours each month to the task, it’s not always possible. Consider employing professional tenant services to handle some of your tasks.
Overland Management is dedicated to making landlord responsibilities easy for anybody to fulfil, regardless of expertise or experience. If you are looking for property management company, please contact Overland Management and let us show you how easy owning rental properties could be.
Setting a rental property’s rent price requires a lot of study and creative thinking, but it’s an essential procedure that assures you’ll get a fair price for what you’re giving. Remember to start with a broad notion based on the worth of your home, then look for comparable both online and in person, and utilize these comparables to identify potential for items that will enable you to fetch a higher rent price. You’ll become an expert on how to establish a rent price for your rental property with the correct amount of study and persistence.