If you have a new property ready to be introduced to the rental market, but have little to no idea how you should price your home, condo, or apartment, you are not alone.
Whether this is your first rental property or the latest in your rental empire, determining the desirability pricing of a rental space can be tricky.
You want the property to be affordable enough to be attractive to tenants, but you also want a price tag that will demonstrate the quality of your space.
Last, but not least, you want this price to net you profit from your investment.
Follow these few tips to help you find the right number.
Determining Factors For Apartment Rent Prices
There are many factors to consider when setting the starting price of a rental property.
If you’re not sure where to begin, consider using a comparison tool such as the one found on Rentometer, which will allow you to compare rents in your area.
Learning what other landlords are charging can give you a better idea of what your particular apartment is worth.
You can also look through classified ads online to find properties similar in style and location.
Because tools like Rentometer don’t consider the amenities that make your apartments desirable, you will need to consider those selling points when creating your price.
View, on or off street parking, yard access and number of units in the building can all influence the price.
Also, consider hardwood and tile floors, access to public transportation, included utilities or stylish kitchen appliances.
Rental experts warn that pricing too high can mean a higher turn-around rate on tenants in apartments.
Having a long-term resident with whom you have a great relationship is better than a parade of renters who love the property but can’t afford the rent.
Pricing a Single-Family Home
Unlike multi-unit properties that allow you to combine multiple rents to make a profit, single-family units are harder to price.
Finding a happy medium between affordability and profitability may seem impossible.
According to real estate advisors, property owners should rent a home for no less than 1.1 percent of the value for houses appraised at up to $100,000.
When you move up into the next price bracket of $125,000 it is wise to rent at 1.0 percent of the home’s value.
That means if you’re renting a property valued at $120,000, ask for a minimum of $1,200 per month.
Keep in mind, most single-family rentals do not typically include utilities.
If utilities are not included in the rent of your home, make sure the tenants are responsible for the electricity, water, sewer, heating, and cooling.
Keep Up Your Confidence In Your Property
Depending on the rental market in your area, it may be necessary to adjust the price to meet the demands of prospective tenants.
You may need to lower the original asking rental rate in order to get renters interested.
Don’t get discouraged and “low-ball” for the sake of filling the space.
You’ll find the right tenant who is willing and able to pay for your property, as well the utilities and proper maintenance. All that’s required is patience and a little upkeep.