When renting out your home, many factors go into pricing your rental. One of the most important is to know what other properties in your area are going for. The problem is that some landlords may not be aware that the average rental price for their area has gone up or down. Some landlords might even be unaware of how to price their rental in the first place. But if you’re looking to attract good tenants and maximize your profits, knowing how much you can charge for rent and still attract potential renters is essential. Here are some tips on how to price your rental for a competitive market:
1. Figure Out Your Monthly Expenses
To find your best rental rate, you’ll need to know your out of pocket cost of owning your home. You’ll need to include your mortgage payment, property taxes, insurance, and management fees. From there, you can see how much profit you’ll need to make to cover these costs at a minimum.
2. Consider Upgrading or Original Features
Real estate is a competitive market, and you want to ensure that your rental is priced competitively. If you’re renting out a property that has been on the market for some time, consider upgrading its features or adding some unique features to make it stand out from the rest.
In addition to upgrades, consider adding more appliances or furniture than the listing shows. If you have a two-bedroom condo with one bathroom, consider putting in a second bathroom so it can be used as an office. This could add thousands of dollars to your rent if needed, but it also gives your property more value and appeal.
If your property doesn’t have much space or doesn’t have many appliances, consider offering a discount or making other concessions, such as giving prospective tenants first dibs on parking spots or pets allowed.
3. Use a Professional Property Manager
Using a professional property manager is the best way to ensure you’re getting the highest amount for your property with ease.
For one thing, a good property manager will know the market better than you do. They’ll keep track of rentals in your area and will be able to tell you what other similar properties are charging. For example, if your home is comparable to another home down the street but is priced higher, it may not be worth your while to list with that agent.
Also, most professional property managers have relationships with potential tenants – people who have been looking for apartments in their area and are ready to move if you’re trying to rent out an apartment quickly and want someone who can show it right away, then use a professional property manager so that they can show it as soon as possible (and without having to wait for you).
4. Keep an Eye on Rental Prices
You can’t know precisely how much people are paying for similar properties in your area. Still, you can get an idea by looking at recent sales prices and asking around local real estate agents and landlords with similar properties nearby.
The best way to figure out what other properties are going for is by going through property records yourself or working with an experienced real estate agent who knows the area well.
5. Don’t Ignore the Market
If you’re unfamiliar with the local rental market, start by researching. Check out what other properties are renting for in your area and consider how they compare to yours. You may want to consult a real estate professional to get an idea of what your property is worth and if there are any areas where you could improve its value. If you have questions about the local market, talk to them before putting your property on the market.
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