Setting a rental property price is a difficult task for many landlords. You don’t want to price your rental property so low that you don’t make a profit, but you also don’t want to price it so high that you can’t get a tenant. Here are some tips to help you figure out what to charge.
As a landlord, you will have to pay a mortgage, taxes, maintenance, repairs, and insurance. At the very least, you will need to set a rental price that can cover these expenses. Tenants, on the other hand, want a nice home that they don’t have to pay too much for, so you will have to come up with a number that works for both of you. Thirty-three percent of renters move each year, and you want to attract as many of them as you can.
How to Find Average Rents
If you’re a landlord, you will want to look online at a rent estimator tool to find average rents. A rent estimator tool can give you a good idea of what to charge for your property based on the size, location, and amenities. It can tell you what other landlords in your area are charging for rent. A rent estimator tool can also give you a batch analysis of multiple properties and allows you to list your property.
Consider the Location
After you have a rent estimate, you should consider your rental property location to zero in on a price. If your property is close to public transportation, shopping, and entertainment, you can charge more. If your property is in a not-so-convenient location, you may need to charge less.
Consider the Property
Another good gauge for setting a rental price is to consider your property. Is it updated? Is there a washer and dryer in the unit? You should look at comparable properties nearby of similar size and condition to get an idea of what you should charge. If your property is larger, in better condition, has new appliances, includes utilities, or comes furnished, you can charge more than your competitor. If you have less than other nearby properties, charge less.
Consider the Season
Demand will affect the price you can charge for rent. If it’s the dead of winter, you may have trouble getting a new tenant. Summer is the busiest time of year for new renters when the weather makes moving easier and when students are graduating from college and starting new jobs. Parents also don’t want to pull young children out of school in the middle of the school year. You may want to wait to rent your property or offer an incentive to get a tenant in the winter, such as a discount on the first month or two of rent. Consider the length of the next lease so that it expires during the summer months.
Once you manage to set a rental price, you should re-evaluate it after each lease expires. You will need to increase the rent annually if you can. You should continue to use an online rent estimator tool and look at listings for rental properties in your area. You will want to keep your current tenant if you can, so it isn’t a good idea to increase the rent too much. Turnover can cost you time and money. It’s a good idea to let them know in advance that there will be an annual increase.
Setting a rental property price doesn’t have to be a challenging task. Just make sure to do your research first. It’s also a good idea to advertise and search for tenants early to get a good one who will pay on time and take care of the property.