Being a property owner comes with a lot of responsibility. Renting out your investments can be an exciting but overwhelming thought.
One of the biggest questions landlords have is, “How much do I charge for rent?”
This can be tricky at times, but we are here to guide you through all the factors that will help you to accurately price your rental property.
Market rent is the average of what similar properties in the surrounding area are being rented out for.
This number is based on the current Real Estate market value. Market rent is one of the top contributing factors in determining rent price.
Other variables do play a part as well:
- Number of bedrooms and bathrooms
- Square footage
- Type of dwelling (apartment, condo, single-family home)
- Pet policies
- Additional storage space
Owners are also able to ask for top dollar rental rates if the property has been recently remodeled or updated.
Calculating market rent
Owners can calculate market rent prices by doing some online research on sites such as Apartments.com.
However, you can get more accurate and hassle-free pricing by hiring a property management company that takes care of the entire rental process for you.
Pricing your rental property can sometimes be a very personal decision as you have invested a lot of time and money into it. A professional opinion does wonders in this situation.
You would not want an over-priced rental sitting on the market for too long.
Your property manager can give you a list of hand-picked properties in the area they find comparable to yours. You can either have them price your property, or they can throw out some suggestions and you decide. It is your investment after all.
An occupancy rate is the amount of used, rented space to the total amount of available space.
This applies mostly to units and complexes where there are several rental opportunities available in one space.
This rate is usually expressed as a percentage. The higher the percentage, the more aggressive your rent should be priced at.
Pricing your rental for you
You need to know what to charge to make a profit on your investment.
Figure out your minimum rent requirement. This is the amount that will cover your monthly mortgage and expenses while providing minimal cash flow.
And then, you have your maximum rent requirement. This is the highest possible amount you can get away with charging renters. This will be in the 70th percentile of market rent rates and up.
Where in this spectrum can you and potential tenants both sit comfortably?
An easy way not to over-complicate this is to decide on a price per square foot. This amount will truly help you to decide where your middle-ground rent requirement lies.
If you still do not feel equipped to price your property just right, contact our award-winning Property Management division and see if they have a solution for you.