Setting the right rent price is both an art and a science. In this blog post, we’ll delve into the factors landlords should consider when determining the rent for their residential properties, ensuring a fair yet competitive pricing strategy.
1. Know the Local Real Estate Market:
It’s important to be familiar with the rental market in the immediate area. This can be done by analyzing data from active and leased properties in recent weeks, assuming the market hasn’t changed, or by intimate knowledge as a real estate agent who visits and interacts with rental properties, landlords, and other real estate agents daily.
It’s important to understand that no one property sets the benchmark price without knowing specific details surrounding it. It’s possible that the landlord took a chance with a tenant with poor credit and charged a premium, or perhaps another landlord was desperate to get a tenant and took less than usual to fill the vacancy.
It’s important to look at the market as a whole, select several comparable properties and use an average to determine the range of market rent.
2. Consider Property Features:
Different features and rental agreement terms aren’t always known or immediately noticeable. Some rental properties may only include a portion of the house as the owner may have excluded an area for personal use or storage, or one house may have included the use of a hot tub, or excluded use of the hot tub. It’s important to familiarize yourself with similar listings by taking a deep dive into what they did or did not include.
3. Evaluate Neighborhood Amenities:
Whenever determining the value of a rental property, and, for that matter, property value, the best properties to compare against are those in the immediate neighbourhood. As soon as you leave that neighbourhood, you need to begin adjusting to the age of the home, the proximity to local amenities, school zones and more. Work with those before expanding your search if sufficient homes have been leased in the immediate neighbourhood.
4. Setting Competitive Rental Rates:
It’s important to set the right price. Depending on market conditions, that could mean pushing the envelope because you have limited competition or undercutting other properties by a small amount when lots of competition exists. This may help you secure a tenant much quicker.
Setting the right rent price requires a thoughtful approach considering both property-specific factors and broader market dynamics. We hope this article provides Landlords with insight into how to handle the pricing of their rental.
