If you are a property owner or you are planning in investing in property, then you should consider the amount of rent that you will put in each of your properties. It is not easy to determine the right amount that your tenants should pay since it needs a lot of consideration. It is not wise to have a fix rate for a property or home by simply picking any rate that you think is good. Instead, a lot of online research and a lot of consultation is needed to decide best rent for your property.
You can determine in an instant if your property is giving high rates or low rates. If you receive a lot of interest in the property it could mean that the advertised rent could be too low. In contrast, if you have little or no interest being showed and your property is not occupied after several weeks then it could mean that you have priced it too high.
So, how do you decide the best rate for your property?
A good place to start searching is your local newspaper. Check it and skim through the listings and take notes of the rents for properties similar to yours. Another way is to check rental prices online for properties similar to yours. It is also good to talk to other landlords you know in nearby neighborhoods to see what they are charging for rent. After researching the range of rates that landlords usually charge you can take each of these sources with a grain of salt. Your property is unique and you can’t pull an average number out a pile of properties and assume that applies to your property as well.
The information above is a good starting point for creating an initial renal figure. Then, you could start considering the accessibility, location, amenities of the property that you have.
Consider the Accessibility of your Property
Tenants are either searching for a place that is near their work or close to their children’s schools. For example let’s look at 2 houses with 3 bedrooms and 1 bathroom that are located somewhere in town with differing price. One is $900 per month and the other one is $800. You notice that the $800 house is a 15-minute from downtown while the other is just a 5-minute bus ride. As you can see, when a property is not easily accessible to the mall, plaza, or public parks then you should not rent your property as highly as a similar property in a more convenient location.
Consider the Location of your Property
You should also consider the location of your property, whether it is in a high income area or low income area. If your property is located in a brighter area with better views, then more people would be motivated to live there. Remember that sunlight drives value. When the neighborhood is nice and it is far away from airport or freeway (which means it is a peaceful place), then you could price it higher than a similar property across the road from a derelict housing commission.
Consider the Amenities that you have
Determining rental values should also be based on the amenities that you have in your property. If you have new high-tech equipment like washing machines, dryers, automatic fireplace, or you have a new building with fenced yards then you could charge the rent higher. If these basic amenities are unavailable then you should probably lower your rental rate. The number of rooms and the size of the property should also be considered. When you have more or lager bedrooms then you can charge higher rent compared to smaller homes and units.
Make your rent flexible
There will come a point when rental rates will reach a cap. When the banks lower their interest rates or lower the minimum down payment required for finance and your rent may be seen as too much in a weaker housing market, lower down payments for financing and your rent is higher, and then tenants can think of an option to buy a new home than rent in your place because it would be less costly.
This is why it is of the upmost importance that you keep yourself informed on the local market and to keep in contact with other landlords or local landlord associations. You should do this because when the local rental market changes the trend in giving the rates would not only affect you but other landlords in the area. You should also make sure that you are continually updated on the employment situation in your area as this will also affect the rent you can be expected to charge.
After determining, considering, and thinking thoroughly what would be the best rent for your property, then, you should consider advertising your property which gives the information that you know would attract potential tenants.
Follow these steps here and don’t take shortcuts. Remember that happy tenants will rent longer and be more willing to accept incremental raises in rent.