For you to determine the right rent for any property you own, many things must be taken into consideration. Start by finding out what the rents in the same area currently are to determine the average rent for the neighborhood. Bear in mind that for the most part, renters are likely to pay whatever the market will bear. Take your time, make use of the internet, and gather as much data as possible regarding the property being advertised for rent in the neighborhood and how much rent is being asked for.
The Average Rent for the Area
Take the time to research the actual rents as well as the advertised rent. Keep in mind that while a property might be listed with a particular monthly rent, this may not be what the tenants are currently paying. Some tenants may be paying more due to credit or payment problems; others may be paying lower rents due to discounts being offered for timely rent payments, tenure, and more.
After looking at average rents over a period of time, check out the local amenities, the location of the property, and of course the overall condition of the property. During your comparison, be sure to keep the comparison period relatively short, a lot can happen over the course of as little as six months. Look at the distances between your home and those you are using for comparison. It is possible there is a beautiful expensive rental just a few blocks away, but all it takes is a major thoroughfare to drastically alter the rentability of your property.
You Need to Remain Flexible in Your Pricing
It’s best to set your rents high in the beginning; you can always lower it if no one bites. Take a look at the various people putting in rental applications, see how many of them are qualified and how many are not. If too many of the applicants are not qualified, you may need to lower your rent. The trick is to find a comfortable mid-point for your rent, one that is just high enough to keep out the tenants who are severely unqualified, but low enough to give you a wide range of qualified applicants from which to choose.
The most important things to remember, are that you need to take plenty of time to do your homework and gathering up the information you need to make an informed decision regarding how best to set the rent for each of your properties. One thing you can count on is that no matter where you set your rent if the figure is too high, the market will surely let you know by the fact you aren’t getting enough qualified applicants.
If you are still not sure, you might want to talk to other property managers in the area and find out what they are charging their tenants. This can help you make the final decision and ensure your rental properties stay filled rather than sitting empty.