Right Rental Price: Learn Some Tips How To Set It?
Right rental price:
Generally, setting a rental price for your property is very important.
This is especially true when you are just introducing the property to the market.
It is also vital when you want to replace tenants that left the property.
To decide the right price, homeowners need to consider a few factors.
With the right price, it will be easy for you to attract the best prospective renters.
Consequently, you will be able to make a good profit through your property.
In this regard, here are a few things you need to do:
1. Evaluate similar properties to determine the rent
Before setting a rental price, check out your main competitions.
These are the properties that have similarities with yours.
This will offer advantages for landlords to easily determine the right price.
Basically, it helps set a price that is neither too high nor too low.
Property owners should consider the following:
Take at a look at similar rentals that are in the same town as yours.
For better accuracy, consider properties in the same neighbourhood as yours.
This is because the other sides of the town may be more or less desirable than yours.
Number of bedrooms and bathrooms
Also, check out properties that have the same size as yours. Notably, pay attention to the number of bedrooms and bathrooms.
Single family homes or multifamily homes
Property owners must also consider the types of homes they own. The rental prices for single-family rentals are usually higher than those for multifamily rentals.
Old construction or new construction
Is the property old or new? In general, new buildings command higher prices than the old ones.
Where to do the comparison with other properties
- Online adverts
Homeowners should consider online ads. There are lots of websites offering such services. Take your time to check out the apartments that tenants rent mostly and quickly. In addition, track the ones that have been listed for a long time.
- In person
Sometimes, property owners may need to check out other apartments in person. Compare these properties to yours. Make inquiries from the house owners if they get lots of interests or not.
- Real estate agent’s view
You can choose to hire real estate agents to list your unit or not. Whatever you choose, you can still hire them to view your units. Real estate professionals usually have ideas of prices and competitions for units. So, they may be able to offer tips for landlords on rent. Would you like to hire a letting agency? If yes, contact us at Reneza today.
2. Set the price to suit the amenities
It is not reasonable to set a standard price for all units of the same size.
In other words, do not place the same rental price on all one-bedroom units.
The same rule is applicable to other units.
Except the units have the same amenities, it is not wise to do so.
Utilize the desirability of each unit to determine the price.
Use the following criteria to determine the rent:
- View of the unit: A unit with a view of the parking lot will be cheaper than one with a garden view.
- Updates: If the apartment has updated amenities, you can charge higher. These amenities can include hardwood floors and appliances.
- Square footage: The bigger the size, the higher the price.
- Layout: Charge lower for railroad style units. This is because they are less desirable.
- Floor level: Usually, tenants are ready to pay more for higher floors. However, a walk up may demand you to reduce the price. This is because people often avoid walking up and down the stairs.
- If the unit has an extra window, closet, or other components, charge higher.
3. The right rent is profitable
There are various goals for owning properties.
So, your goals may be different from those of other house owners.
Irrespective of the goal, the suitable rent must cover all you have spent on the property.
The right rental price must:
- Pay your PITI mortgage, if available
- Repair and maintain the units
- Cover vacancy costs
- Provide some profits every month. Generally, you should make an average profit of zero to six percent monthly.
Nonetheless, this may not be so for owners with large mortgages or construction loans.
They only usually make a profit after selling the property.
Sometimes, they make a profit after owning the units for a long time.
Whatever the case may be, your property investment must be profitable.
4. Do prospective renters request viewings?
Are prospective renters showing interests in the units?
Have they been requesting to view them?
If not, you may have a problem with the rental price.
An exorbitant rental price will send the renters away.
Also, if the amenities or location of the unit does not justify the price, they may avoid it.
So, one essential tip for a house owner is that the price should suit the property.
The unit must offer values that are worth the rent.
5. Market demand is pivotal to the rental price
Constant adjustment is often required for rent.
This is because there are often changes in prices over time.
For instance, a bad economy can affect the affordability of rent.
As a result, the demand for smaller, cheaper units can increase.
Similarly, summertime may increase the demand for large units.
This is a result of the need for many families to move before the school’s resume.
Therefore, you must pay attention to the trend to adjust your rental price.
When a kind of apartment is in demand, increase your rent.
If otherwise, reduce the rental price to attract more prospective renters.
You can hire experienced real estate professionals to manage your home.
At Reneza, our experts with a vast wealth of experience can help you.
Our real estate solution and legal tips will be customized to suit your needs.