Over the past few years, the rental market has boomed. There are currently 36% of households living in rental properties.
It is possible to make serious money if you own a rental property. In 2021, for instance, rental prices reached an all-time high. The same is expected to happen again this year.
The fact that you can does not mean you should. A landlord does not want to bleed their tenants dry with astronomical rent prices. How do you set a fair rental price for a rental property?
To help you determine a fair rent price, we’ve examined some things you should keep in mind.
Consider comparable properties when determining a rental property’s price
The easiest and first way to learn how to price a rental property is to look at similar properties.
In many ways, that’s obvious, but in some ways it’s a bit more complicated.
How does a comparable property differ from a similar property? There is no clear answer to that question. In addition, it plays an important role in finding tenants.
To set a fair rental price, you should take into account all the details of your property. Two common variables that can affect rental prices are the number of bathrooms and on-site parking.
Let’s say you hire a rental property management company to rent out a two-bedroom apartment. The apartment in this example has two bathrooms in a neighborhood popular with young professionals.
As a result, setting the right price becomes easier. On a property listing site, you can find two-bedroom apartments in that area. If you wanted to get more advanced, you could even create a spreadsheet to track prices over time.
Make adjustments as necessary
A market’s first rule is that it sets its own price. It doesn’t really matter how much a property is worth if no one is willing to pay for it. Therefore, when setting a fair rental price, you need to consider that willingness.
However, it can be difficult to obtain concrete data in this area. If someone declines one of your rental properties due to the price being too high, you may want to consider this. Ask them what price they would be willing to pay if you can.
It might be possible to adjust the price based on the feedback if you’re able to collect that data point. The rental price might be lowered by 10% if you were able to get several responses, for example.
A property management company can also provide you with these benefits. A rental property management company manages all of these variables for you, so you don’t have to worry about it.
Looking For Rental Property Management?
Having learned how to price a rental property appropriately, you’ll want someone to manage it for you. Schedule a call with us to learn more.
