When you invest in a rental property, one of the most important things to avoid is a vacancy. Determining the correct rental price is essential to having quality tenants. If you price too high, then you risk having your property sit unoccupied for too long. Price too low and you may have an easier time finding a renter but won’t be maximizing your return. Here are a few important factors to consider when pricing your rental property effectively.
Find Comparable Rental Prices in Your Area
Do your research on neighboring homes and business locations that are also for rent. If your rent is significantly more than others, then your property will likely be empty for quite some time. With so many websites available today, most renters can quickly and easily find rental units in their neighborhood and will know exactly what prices are fair for the location they want to live in. They will be comparing your property to the others so it’s important to know your competition. This doesn’t mean you should simply reduce your price to be lower than others, however. Doing so will undermine the amount of profit you receive from your investments and could attract undesirable tenants.
How Many Other Rental Properties Are in the Same Neighborhood?
Is your property in an in-demand area with great schools and popular shops and attractions nearby? Are there only a few homes available for rent in the area? Then you can probably increase your price easily without having to worry about vacancy issues. On the other hand, if there are twenty homes for rent within five miles, you may have to consider lowering your price slightly to attract renters.
Does the Property Include Extra Amenities?
Don’t forget to highlight the extra benefits that your property has over others so that renters know that your higher price is well worth it. Do you have a swimming pool or spa? Are there five bedrooms, a den or a large workshop in the backyard? These extra features are often highly sought after by families and they will likely be willing to pay more for it.
Don’t Forget to Factor in Other Costs Associated with the Property
Many novice investors will set their rent price without thinking about all the costs that will be the responsibility of the owner. Here are a few examples:
- HOA Fees
- Insurance
- Mortgage and Bank Fees
- Property Management Costs
- Maintenance and Repair Bills
Remember that once the tenant signs the lease agreement, you will be under contract for a year or more. That means if you end up taking a loss for each payment, you could end up with a big problem, particularly if something unexpected occurs, like a burst pipe, pest problem or extensive renovations when the tenant moves out.
Need Help Managing Your Rental Property? Call the Experts at DKRentals.net
Do you have a rental property in the Metro Atlanta area? Give the property managers at DKRentals.net a call today. We can help you set the correct rental price to ensure you get the best return. Contact us
