Rental properties can be great investments, but the amount you can make may vary significantly.
Professional rental valuation will help you determine how much you should charge for rent. If you're not charging the right amount, you may not get the best ROI on your property. There are several myths that lead investors to set prices poorly, and they end up missing out on potential profits.
In this guide, we'll go over some rental property pricing tips to help you get the most out of your rental properties. Keep reading for more.
You Can Set Any Rent Price You Want
While this is true in theory, it's bad to think with this mentality. Supply and demand have a huge impact on rental prices, so if your rent is too high, no one will be interested.
When renters have a choice between your property and other similar ones, the cheapest option will naturally be more appealing. You need to maintain a suitable rent price if you want to be able to find tenants.
You Can Raise the Rent Price at Any Time
Many landlords think that they can raise the rent price at any time, and some actually try to. However, there are rent controls in place, and you need to abide by your lease.
May district counties in the US put limits on how much landlords can raise rent. You also can't make such changes during the lease agreement period. You've already specified the rent price and the duration, so you need to stick with this price until the lease ends or the tenant leaves.
Rent Should Be Set in Line With Expected Inflation
Some landlords try to use inflation as a rent valuation parameter, but those with more experience know that they can't do this. Rental pricing is affected by several other factors, so if you just go by inflation, you may set the rental price too low or too high. It's important to take all necessary factors into consideration to set a suitable price.
Landlords Know the Rental Value of Their Properties Best
Many landlords feel like they have the best idea of the rent price they should set, but this is rarely true. To find the most suitable price you need to have a high level of understanding of the property market in your area and how different elements affect property value.
Professional property managers are far more qualified to perform a reliable rental analysis. They can look at a range of factors to help you find the best rental price for your property.
Professional Rental Valuation
If you set the rent too low, you'll find tenants easily, but won't be making as much each month as you should. Conversely, if you set it too high, you'll have a much harder time finding tenants. Having a professional rental valuation done will help ensure you set the right price.
Rental Zebra has been providing various property management services in Merced, Stanislaus, San Joaquin Counties, and beyond for over a decade. Take a look at our property management page to see more about how we can help you as a landlord.
