How to Set the Right Price for Your Apartment Complex
When it’s time to set the price for your rental property, you may be tempted to just set the price at your mortgage — or even half the amount — to determine a “fair price” for your property. That’s the last thing you should do.
What’s wrong with this method? Easy — it doesn’t take into consideration what your property has to offer. Furthermore, you can’t rely on what you are paying because you may have a very low or high-interest mortgage that skews your monthly payment — not to mention how your down payment would come into play. You could have even purchased the property for a steal because it needed a lot of work.
As you can see, this method fills with holes quickly and leaves you either cheating yourself or pricing your property too high, which will cause it to end up vacant. So how do you set the right rental price for your property?
Consider Other Rental Prices
To begin working towards a price for your rental property, you should start with other properties in the area. This is what real estate agents do when determining how to set a price for a home, so you should do it too.
A good source for this is any site where you can find rental information, such as Rentometer's rent comparison tool. Look for properties comparable to yours and in the same area to narrow it down. Then ignore any listing that has been on the market too long. On average, you should expect a properly priced unit to be rented within 30 to 60 days.
Once you have a good list of comparisons, consider what you’d expect to pay for the same space. The goal here is to arrive at a price you are happy with, but that will attract long-term tenants so you profit. The higher the rent, the higher the turnover rate.
Know When to List
The time of the year you list your property could determine how much you get for it and even if it stays vacant or not. Do your research and look at market trends and saturation for your area so you list your property at just the right time.
Consider the Features of Your Property
The features and amenities you offer to a future tenant will have a large influence on the price they are willing to pay. Sit down and list all of the features of your property so you can be perfectly clear on the listing.
Consider if you offer any of these value-added features:
● Recent updates
● Neutral paint colors
● Hardwood floors
● Stainless steel appliances
● Dishwasher
● Plenty of closet space
● Additional storage (attic, basement or garage)
● Safe neighborhood
● Central location close to public transportation, shops and restaurants
● Included utilities
● Off-street parking
Point out those benefits to potential renters when you interview them for the property.
Evaluate Aesthetics
Depending on your lease, tenants can’t paint the rooms, so be sure to have a neutral paint palette. Hardwood floors are desired over carpeting because they are easier to clean and are more aesthetically appealing.
Additionally, stainless steel appliances in the kitchen and modern fixtures in the bathroom will attract more tenants. Make these updates when possible to command the best price for your unit.
Offer Off-Street Parking
No one wants to park their car on the street, subjecting it to anyone who walks or drives by. A parking garage is nice, but it often means a bit of a walk, which is inconvenient when you need to bring in groceries.
Off-street parking is a major selling point. If you a private parking space is included with your unit, that’s even better. Consider upgrading it, and your rental price as well, with a gated driveway. A gated driveway adds security and it makes the property look high-end, which is desirable for tenants.
Make Safety and Security Additions
This one doesn’t need much explaining. Everyone wants to live in a safe neighborhood that makes them feel secure instead of fearing they will be robbed — or worse. Cautious renters will check the crime statistics in the area, so you should too.
You can easily see the crime activity with a quick search to know what you’re dealing with. If you find out you’re immediate area is safe, be sure to put that in your listing. If the crime report shows you otherwise, you may consider adding additional security features such as a security alarm or ample outside lighting to make the future resident feel safer.
Hopefully, this post helps you determine how to set the price for your rental property. Remember to re-evaluate your price at every lease expiration to make sure you are keeping up with current market trends.
About the Author: This article was written exclusively for Rentometer by Megan Wild. Megan Wild is a real estate and home improvement blogger who writes about easy ways that you can fix up rentals or your home. When she’s not sanding her next project, she’s found walking her dog, Tucker.
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