Rental prices change nearly every year. So, setting a cost for your rental can be a challenge. Your goal should be to get the best return on your investment. Here are a few tips to determine how high you can price your home’s rental price.
Start With The Value Of Your Property
Find a home appraiser who can give you a recent assessment of what your home is worth on the market today. Some investors use the 1% rule to ballpark on what the monthly rent should be. If the property is valued at $100,000 then the rent should be about $1,000 per month. Multiplying by 1% is a quick and easy way to guesstimate rent. It is important however to compare your property with others in the market. You do not want to overprice your rental and have a challenge getting a tenant.
Comparing Properties In Your Area
Creating an RMA (rental market analysis) is the first step in charging for the right rent.
Factors to focus on when reviewing the rents of comparable properties include:
- Neighborhood characteristics and rating
- Number of bedrooms and bathrooms
- Property square footage and floor plan
- Age of construction
- Lot size and landscaping of front and back yards
What Are Amenities Charges?
Amenities are defined as desirable or useful features of the rental property. Amenities look to provide comfort and convenience for tenants occupying the property. They encompass additions that are in excess of the basic needs of an individual and usually include features such as pools, workout facilities, and internet. There are a number of amenities and points of interest that renters look for when choosing a rental property. This list is just a few amenities listed by the Buildium Renters Report.
Renters are willing to pay more for the following amenities:
- An updated laundry room
- Smart camera and security system
- Pet friendly
- Ample parking and a garage
- Yard/patio and outdoor space
- Central air/heat with smart controls
What Are Rental Comps?
Rental comps are used to compare similar rental properties to one another. There are several big benefits of keeping your property rent similar to what other investors are charging for comparable housing. You’ll be able to maximize the value of your rental property by renting to the most qualified tenants, keeping vacancies low, and keeping your gross rental income and cash flows as high as the market will allow. Look at different listings that are similar layouts to your property and that offer the same amenities as your property offers. If your property features unique amenities, you will be able to set a higher rental price.
How Do I Track The Rental Market?
The more competitive the housing market, the more likely you will be able to find motivated renters who might be willing to spend more on rent.
- Seek out micro information, not general overviews.
- Befriend a trusted and local real estate agent.
- Build a team of trusted advisors.
- Keep an eye on the pass-through rate.
- Maintain an online network of real estate professionals.
- Treat real estate like a long-term investment.
- Listen to podcasts by industry experts for non-experts.
- Pay attention to key market drivers.
Rent Estimate Tool
There are a number of free and premium rent estimate websites and tools available, but which one is most accurate? Rent estimate reports are accurate relative to the data that is used to compile the report. The real question lies in the freshness of the data that is used to calculate the estimate. Most rent estimate reporting tools are pulling data from listing sites and public records. The different rent estimate tools provide rent estimation and are designed to help property managers determine what will best benefit them financially.
Here is a list of rental tools you might want to use:
- Zillow rent manager-free
- Rentometer free
- Rent fax premium
- My rent rates free
- Rentrange premium
What To Include In A Home Lease
Lease agreements for houses are almost identical to those drafted up for apartments, but depending on the landlord, the inclusions can be minimal or extensive.
That said, along with the rent amount and duration, most house rental agreements tend to include the following:
- General conduct requirements
- Parking restrictions
- Pet allowances
- Proper use of outdoor (or common) space
- Property alteration restrictions
- Garbage removal
- Maintenance requirements
- Utility responsibilities
- Guest restrictions
Can I Have A Property Manager For One House
The short answer to this question is yes. Not only can a property manager collect rent on your behalf, but they also know all the local tenant codes and laws. They even know the rules about storing security deposits, which they can also collect for you. If you find the process of renting a bit overwhelming hire a property manager. They will conduct all necessary market research, set the price, manage the leasing process, and take the responsibility off your plate. Whether you rely on a property manager to help you determine the price or utilize online calculating tools, the right price will attract the right tenant, and keep your property rented and profitable.
Contact us (866-500-6200) for more information today!
About Real Property Management Midwest
We are local property management experts serving Cincinnati, Dayton, Columbus, & Louisville. We manage Single-Family Homes, Apartment Buildings, and Condos. With years of experience, Real Property Management is Cincinnati, Dayton, Columbus, Louisville and Northern Kentucky’s #1 Property Management and Leasing Company.