6 Tips for pricing your rental property
When you are ready to list your property for rent, pricing is everything but how do you price it? We have compiled our best tips for pricing your rental property here!
The monthly rent amount is a significant factor in how successful you will be in renting to a quality resident quickly, making a monthly profit, and resident retention. Let us cover the basics and some tools that HomeWorks Property Management uses to set rental rates.
What is market rent anyways?
Market rent is the average rental price of other similar properties in the vicinity of your property.
Pulling Rent Comparables:
A rent comparable or rent comp is a comparison of your property to others in your local market. To accurately comp your property, you need to consider several factors, including square footage, the number of bedrooms and bathrooms, features and amenities that your property offers, and the rental rates of similar properties in the area. The best way to do this is to hop on zillow, search properties for rent in your zip code, and filter them starting with the number of bedrooms and bathrooms.
Dont forget about square footage:
For an accurate comparison, you need to take into account the square footage of the property. Let’s say, for example, that your property and the property on the next street are both 3 bed 2 bath townhomes in the same development, but your rental is 1500 sqft, and your neighbors rental is 1850 sqft its unlikely that you will be able to convince anyone to rent your home for the same price.
Supply, demand, and rental cycles:
Even if you have comped your property perfectly, you have to consider supply and demand and the rental cycle. If you are in a market with few renters and many rentals, it will take longer to fill a vacancy than in a high-demand market with many people looking to move and a few properties to move into. Also, consider that spring and summer are prime moving times as opposed to winter.
Upgrades and amenities:
Location is everything when determining what amenities your prospects will be looking for in your rental. A parking pad is everything in Canton but won’t matter in an area where you can find a spot to park on the street with no problem. Remember that not every amenity will matter to every prospective resident, so make a list of all the great features your property offers and include it in your listing.
If your rental hasn’t been updated in a while and is still sporting a flamingo pink bathtub and toilet with wood paneling throughout, you’ll not be to charge the same rent rate as a property that has been renovated in the last couple of years.
The price is right.. IF
How do you know if you set the rental price correctly? The idea here is to always be evaluating. If after the first 7 days you still have zero or very minimal prospective resident inquiries, you should drop the rent and continue to do so every 7 days until showings pick up.
- If you see other properties in your area coming off the market quickly and still have minimal showings, your asking rent is to high.
- You have 20- 30 people a day wanting to see the property, and most of them want to hand you money on the spot; the rent is too low.
There may be other factors to consider besides price:
Always make sure that you are painting the best picture of yourself and your property.
Review and compare your rental listing with others in your area and look for the following;
1.) Pictures
Do you have 20-30 high quality photos of your rental in your listing?
2.) Curb appeal:
How aesthetically pleasing is the exterior of your property when compared to other rentals in your area?
3.) Customer Service:
Do you respond to prospective resident inquiries promptly and professionally?
When pricing your rental property you will need to invest time and effort through the entire process. Yes, you can do this yourself or you can reach out to HomeWorks Property management for a free rental analysis. We can assist you with everything from marketing your rental property to providing professional property management services.