Pricing your rental property is one of the big pieces of the puzzle for owners. People are always asking us at Charlotte Homes and Rentals what their properties will rent for. Because it’s such a popular subject, we thought we’d talk today about how to set a rental price.
It’s important to start with good data. Before you can set a rental price on your own property, you have to know what other properties are renting for. Take a look at your local area and analyze the rental prices for similar homes. Be as specific as you can. Look at the neighborhood your house is in and find out what those neighboring properties just like yours are bringing in for rents. The goal is to establish a list of comparable rentals. This is similar to what your real estate agent does when you are selling a home. You want to make sure you’re listing it at market value. It’s the same thing with rentals. You don’t want to overprice your rental property or it will be vacant for too long. You don’t want to underprice it either, or you won’t get a good return on your investment. Good comparables are important.
The condition of your property is just as important as the market comparables. The way your home looks will have an impact on how much rent you can get. Make sure your property is clean and that everything inside and out functions properly. Treat the home like you are selling it, and you’ll get a good rental price.
The marketing timeframe also has a lot to do with your rental price. The time of year that you place your rental property on the market will have something to say about how quickly you rent it and how much you can rent it for. You might get a little more money and it might rent a little faster in March or April than it would in November or December. The fall and winter are slower times for rentals, as compared to the spring. During the least active months we typically need to be more aggressive with pricing.
Sometimes, it makes sense to keep your price lower. For example, if you have a home sitting at $1,000 per month and it’s vacant for two months, you are going to lose money. If you had put that property on the market for $950 a month instead and it rented right away, you’d make more money overall. Vacancy is the most expensive thing for property owners. Price it correctly and keep it in good condition so you can avoid those vacancies.
If you have any questions about how to price your rental property, please contact us at Charlotte Homes and Rentals, and we’d be glad to talk to you.