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How to determine rental rates

It is important to find just the right rental rate. To high and you can sit on the market vacant and lose income, too low and you are giving away possible income. 

The first step is comparing your property to the current market. This involves researching both currently active comparable properties and properties leased in your close vicinity. Your rental will be directly affected by other homes on the market. Tenants are savvy shoppers and with the online resources they can view dozens of properties in a short period. Your property needs to be competitively priced with other active rentals in your area. The next factor is currently leased properties in your direct vicinity. Another rental on the same street, neighborhood or community can be a good benchmark for the monthly rent of your property.

The rental market is highly influenced by the time of year. The market activity is a consistent bell curve starting low the first of the year and peaking in the middle of summer the falling the end of summer through end of the year. This can be directly related to events throughout the year.  First of the year market is slow people are concerned about tax payment from last year and coming out of Christmas. We see a pickup in March with the tax returns and spring break. Market continues to rise with summer approaching. Summer marks the high point of the year. With children out of school tenant are urgent to move and settle in before summer activities and vacation. As Summer ends we see a slow as families prepare for school. The market continues to slow as we enter the fall and the Holliday season. The market slows to a crawl as most tenants don’t want to move over Christmas and New Years Break.

Lastly is the location and condition of the property. You can compare your home to the house down the street but you have to also look at the other factors. Is your home nicer, have a better lot, not have trashy neighbors, or does it back to a busy road. These are all factors that affect the price of a rental.  Yes the home down the street rented for top dollar, but it has larger lot, a better view and it’s in better condition. You have to do an honest evaluation of your home. While you put semimetal value on the tree in the back yard and the view of your kids elementary school. A tenant is looking for the best value and fit, not semimetal value.

EXPERT Property Management can create a custom rental evaluation for your property. We are able to pull local and current research to demine how to get you the best return in the shortest time.  Give us a call and let us help you market your property.

 


Published by Expert Property Management.