How can I maximize my property’s rent?
When you get a rent estimate for your rental property investment, you have to bear in mind that the price you are asking is going to impact the vacancy period. A vacancy is a period when you’re not making any money. Every week that your property is vacant eats up 2 % of your annual income on that property. So, a full month that’s vacant means you’re down 8 %. That vacancy period may be due to not having the correct rent estimate for that property.
How Much Should I Rent My House For? Do Compare Similar Properties
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At HomeVault, there are a few things we do to price your property correctly. We compare similar homes to what we’re currently renting. We look and see what has recently rented and we give you a market rent. We’ll look at the price per square foot so we can have a standard, and then we also consider the quality and condition of the home and where it’s located.
Do Consider Market and Timing
We want to know what the market activity is before we give a rent estimate for that property. In January and February, things are slow. So, it’s best to lower the price so you can get your home occupied. In busier months, you can consider raising the rents or looking for tenants at a higher rental rate.
Don’t Price Based on Mortgage and Fees
Some of the variables that should not be used to come up with market rent include the mortgage on the property. While we would all love to cover our mortgage and property management fees, that’s just not always possible. So, keep in mind that we cannot use your mortgage payment as a standard for the rental price. We want to keep it in the right market range. Tenants will know what the rental market looks like. They’re out there shopping for a home, so they know what to expect to pay.
Another variable not to use is the property management fee. Don’t add that to what you ask for rent. It might lead to a longer vacancy. You need to find the right target for your rent so you keep the property occupied and the income flowing.
If you’re a DIY landlord looking for a simple way to keep track of your income and expenses and plan your monthly or yearly budget accordingly, the HomeVault Rental Income Calculator is your go-to tool!
DownloadDon’t Take Pricing Advice from Your Sales Agent
The final factor to avoid when pricing your property is advice you might get from your sales or buying and selling Realtor. Sales agents will always have an opinion on what your property is going to rent for but check with a property manager for a more accurate rent estimate. You wouldn’t want your property manager to set a sales price on your home. So, use a professional property manager to do good market research and come up with target rent to minimize your vacancy.
If you have any questions about how much to charge for rent in any of the markets in which we operate, please contact us at hello@homevault.com.
Credits: Photo by Mohamed Hassan on Pixabay.
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