In 2019, 36% of the 122.8 million households in the U.S. are rented. With this many rental properties, it's understandable to think there are many circumstances that you can learn from to price your rental property.
Pricing rental property can be a tricky task for real estate investors. It is important to consider various factors such as the local market among other things when determining the right rental rate.
This guide will provide a comprehensive overview of how to price rental property for investors. Read on to start making more money renting your property.
Market Analysis
The first step in pricing a rental property is to conduct a market analysis. This includes researching the local housing market and determining the average rental rates for similar properties in the area.
Factors to consider include the location of the property, the number of bedrooms and bathrooms, and any unique features or amenities. By understanding the market and what similar properties are renting for, you can set a fair and competitive rental rate.
Property Conditions and Amenities
In addition to market analysis, it is important to consider the condition and amenities of the property. A well-maintained property with updated appliances and amenities will typically command a higher rental rate than a property that is in need of repairs or renovations.
In addition, properties with unique features such as a backyard or a pool may be able to charge a higher rental rate.
Property Management
Another important factor to consider when pricing rental property is property management. Hiring a trusted property management company can be a valuable investment for real estate investors as they take care of the day-to-day responsibilities of renting out a property.
However, these services come at a cost. So you will need to factor property management fees into the rental rate.
Vacancy Rate
Another important factor to consider when pricing rental property is the vacancy rate. This refers to the percentage of properties that are currently unoccupied in a given area.
If the vacancy rate is high, it may indicate that the market is saturated and that rental rates may need to be lowered in order to attract tenants. On the other hand, a low vacancy rate may indicate a high demand for rental properties and an opportunity to charge a higher rental rate.
Inflation
Inflation is another important factor to consider when pricing a rental property. As the cost of living and the cost of goods and services rise, landlords may need to raise rental rates in order to keep pace.
This is especially true if the rent has not been increased in a while. By keeping an eye on inflation and making adjustments to the rental rate accordingly, landlords can ensure that they are not losing money on their properties.
Ways of Pricing Rental Property
Pricing rental property is a crucial step for real estate investors. By conducting a market analysis, considering the condition and amenities of the property, and factoring in property management costs, investors can set a fair and competitive rental rate.
At Houston Property Management, we have an expert property management team ready to serve your needs. Here you can learn more about us and what we can do for you.
