Setting the right price for your rental property is probably one of the most challenging tasks for a landlord. Since tenants can do their own research on comparable (thanks, internet!), you should be careful when deciding how to set a rent price for your rental. Too high and you'll be faced with vacancies, too low and you won't see the kind of cash flow that makes being a landlord lucrative.
Checking comparable properties is not always enough. There are additional factors that can significantly impact the price.
Analyze each of them to determine if you're following an accurate pricing strategy:
Location matters
Depending on the location, the price of the rental varies. You cannot require unjustifiably high rent for a one-bedroom apartment in the middle of nowhere. But if your rental property is located close to public transportation and within walking distance to city center, schools, shopping malls, and other facilities, it won't stay vacant for too long.
Also, people pay particular attention to the neighborhood. Is it safe enough? Who are the neighbors? Overall, the evaluation of the neighborhood is what will help you set the right price.
What's inside your rental?
What makes your rental special? If you've installed expensive appliances or purchased luxury furniture, you'll naturally want to charge a higher rent price.
There are also some strange ways landlords try to increase the value of their rentals: they advertise their rental property as a haunted house and capitalize on "paranormal phenomenon and unexplained activities" in a house. Surprisingly, some tenants fall for it.
If you feel like there's something more you can do to increase the rental value (besides claiming you've seen a ghost), go for it. For more ideas, read this article about Affordable Ways to Increase the Rental Value.
Research comparable rentals
By analyzing rental units in the surrounding area, you're more likely to understand what's a reasonable price for your rental. Take a look at the homes similar in size and conditions, the same number of bedrooms and bathrooms, etc.
Search for rentals on listing websites that have a filter option so that you can select the features of the property you're interested in.
Ask real estate professionals
It's not easy to keep track of rental industry changes, but a real estate agent can help you with that. They'll take a professional look at the property and help you set correct rent prices.
What do you think are other factors that affect rent prices? Share your thoughts and ideas by leaving comments below.
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