Is Your Property's Rental Rate Correctly Set?
As a landlord, you have several responsibilities, including setting the rental rate for your property. The rate can have a bearing on whether your property remains vacant or if it is consistently rented. Before setting the rental rates for your property, here is what you need to know.
What Should You Avoid Doing?
Setting the rental rate for a property can be tricky. If you set it too low, renters will wonder what is wrong with the property. If it is too high, they will skip over your listing and look for more affordable options. In setting your rate, there are a few things you need to avoid doing to avoid missing the right price for your property.
One of the mistakes you need to avoid making is pricing the property based on emotion. For instance, if it is your starter home you are renting, wrapping in your emotions about how your family started there could lead to you pricing the home too high.
You also need to be careful about putting too much weight on the amenities that the property has. If the home is equipped with amenities that renters are not looking for, paying extra for them will not make sense.
In addition to this, you need to avoid setting a deposit that is too high. Even if the rental rate is reasonable, renters might still skip your property if the deposit is far above the average for a rental.
What Should You Do?
You should start by looking at rental properties that are identical to yours. Try to find properties that are consistently rented. You want to look at what they are charging and try not to be overly excessive when you set your price. Remember, the other properties are your competition and if they are reasonably priced, it is more likely that renters will choose them first.
You also need to assess your property's amenities. Features, such as the square footage, storage space, and upgrades matter. If you have any of these features, you might be able to set a slightly higher rate if they are in demand in the area. Again, compare your features to those of other rental properties in the area.
The demand in your area is important, too. For instance, if the economy is on a downturn, renters in your area are likely to be looking for less expensive rentals. Lowering your rate might be the best move.
A property management company can help you with determining the right rate for your rental. The company can also help with overseeing the property and assist with screening applicants.
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