Knowing how to price your rental property is important in ensuring you get a good tenant in place, and that you avoid longer than necessary vacancies. Remember that the market will dictate what you’re able to charge, not your own idea of what you need to earn on your property to meet your mortgage payment, tax payment, and insurance costs.
How Much Can I Rent My House For? Competitive Pricing
The return you earn on your investment depends on your rental income. You need to charge as much as the market will bear so that you’re earning the maximum amount of rent you can every month. However, overpricing your property will only cost you a lot of money in vacancy and turnover costs. If you charge too much, good tenants will pass on your home and choose others that are just as desirable but cost a few dollars less every month. Do some research so you know what other properties like yours are renting for in the area, and attach a competitive price to your own home.
Timing Matters with Pricing
There are several factors that influence your rental price. Location is important, as well as amenities, and the size and condition of the home. One thing that many people neglect to consider is time of year. Typically, the market follows the weather and the school season. You’ll be able to ask for more rent in the late spring and summer months, when people are moving and actively looking for properties. Try to time your lease renewals for some time between March and October. That will make it easier for you to raise your rent or to charge more rent for new tenants who may be moving in.
Raising the Rent
Tenants will usually expect that a rent increase is coming when they decide to renew their lease. Conduct a market survey before the tenant’s renewal date so you know what the market is demanding and what rental properties in the area are going for. If you have a great tenant in place, don’t raise the rent so much that your tenant is motivated to move. When your rent is about $50 below market rent, you might consider keeping it where it is, and not raising it. That will make your tenant want to stay and sign for another year, and you’ll save money on turnover costs and marketing to find a new tenant. Even when rents are going up, a positive tenant who pays rent on time and takes good care of your home is someone you want to keep.
If you have any questions about rental price or Seattle property management, please contact us at Real Property Associates.