Every real estate investor or landlord is ultimately looking to gain the most potential value from their property. However, that doesn't mean you should go ahead and set your rental prices too high; renters will be driven away by the incredible cost. So how can you find the right price for your rental properties that will draw in tenants while still letting you walk away with a profit? Here are a few elements to consider when setting rental property prices.
1. Compare To Your Neighbors
While the location is overall still incredibly important in determining your property's value, it's not the only neighborhood-based factor to consider. Take a look at what similar properties in the area are being rented for by checking out property reports and rent statistics. Potential renters are going to aim for the best value they can get, and keeping your competition in mind when setting your prices is essential. You don't want to be the most expensive on the block, but you also don't want to be at the bottom of the totem pole either.
2. Keep Condition In Mind
Not all properties are created equal, and even two buildings with similar numbers of rooms can rent for very different prices. Why? It all comes down to the condition of the buildings. Try to stay on top of upkeep for your property as much as possible, since renters can tell the difference between a well-maintained property and a neglected one. This includes larger components like appliances and utilities; a standard water heater only lasts 10 to 15 years before corrosion attacks the tank walls, and will need to be replaced eventually.
3. Crunch Numbers With A Rental Rate Calculator
If you're struggling with finding the average neighborhood rent, you'll want to look into a rental rate calculator. Rental rate calculators are able to use property reports and other neighborhood information to estimate roughly what you should be charging renters. This will help you narrow down an ideal range for your property as a starting point, and from there you can use your judgment to make the best call on what you think your property is worth.
Setting your rental prices too high or too low can be a serious blow to any landlord, but using a rental rate calculator can help. To learn more about rent estimates and how you can find a fair price for your property, contact Rentometer today.