Whether you are beginning to rent your property, or whether you are renting an existing vacancy, it’s paramount that you choose the most optimum rental rate.
Choosing the right rental rate matters. Opting for a higher rental rate than is warranted means your property attracts fewer eyes. Opting for a lower rate means you’re not capitalizing on the true value of your investment.
Choosing the best rate isn’t always easy.
Here, we’ve put together a quick guide to help you on your way – factors that should influence your decision on what value to put on your vacancy.
Review Local Competition
Reviewing local competition is the very first step.
This provides enormous insight into the approximate rental range to seek. Of course, you need to be focussed. You can’t compare two properties that aren’t similar. You need to focus on properties that are like yours.
You also need to think about the neighborhood. Focus on properties as close to your neighbourhood as possible. In addition, get down to detail and choose properties that have the same number of bedrooms and bathrooms etc. Also, properties in newer developments tend to command higher rates.
Not sure where to look?
Think about searching online ads, such as in Zillow. Think about checking apartments out in person, comparing those apartments to yours. To truly determine the most optimum rate, consult a local real estate agent who are forearmed with the facts and knowledge you need to know.
Get Down to Detail
To set the right rental price, you now need to get down to detail. You need to ask yourself the following questions:
What are the unique features of your property? Does your apartment have a special view, or is it facing a parking lot?
Is your rental property upgraded with the very latest appliances and features? What about technological features? Younger renters are willing to pay a higher rate for these added features.
What is the size of your property? Compare this size to other local properties in your area.
How would you define the property layout? Open plan formats with optimum lighting tend to attract higher rental rates.
What floor is your apartment on? If your apartment is on a higher floor, and so commands a better view, you should capitalize on this with a higher rental rate.
How would you define storage space? Is it well contained, or is it limited? Storage is an important factor for families, who are willing to pay a premium for extra storage.
Choosing the Best Rate
To set the right rental price means maximizing income potential.
The optimum rental rate is also a rate that achieves a profit after all other costs have been accounted for. These costs include mortgage payments, maintenance and repair and vacancy costs.
If you haven’t chosen the right rate, you may notice a lack of interest. How many people have expressed interest in your property? If there aren’t many interested, prospective clients, then the rental rate may be the cause.
Of course, optimum rental rates adjust. Market rates are always in flux, adjusting upward or downward depending on economic circumstances. If your property has been vacant for some time, you may need to think about adjusting the rate in-line with these economic changes. You need to be proactive and willing to adjust the rental rate accordingly.
Triumph is the leading property management company in Las Vegas. Check back to our real estate blog soon for even more great tips and tricks on how best to manage your rental property in both the short and the long term.