You always wanted to get into real estate and now you own rental properties! A recent survey found that about 123 million Americans rent. So, there are plenty of potential tenants for your property.
You're about ready to list your properties, but you're not sure how much to set the rent for. Too much and no one will want to move in but too little means you'll end up in the red!
We put together a quick guide with 7 easy steps for setting rent prices. Keep reading to learn everything you need to know before advertising to potential tenants.
1. What Time of Year Are You Listing?
Certain times of the year seem more popular with renters looking to move. If you're listing your property in the summer, you can often charge more because more people want to move during summer break.
2. Check Out the Rent Prices in the Local Area
One of the most important rules in real estate investing is location, location, location. The location of your property will determine how much rent you can charge. The more desirable the neighborhood, the higher the rent can go!
3. Is There a High Demand for Rentals in the Area?
Some areas have a ton of homes for sale but few for rent. Those few rentals can have higher rent because there aren't many options.
Also, consider the population of the area. In Hawaii, there are about 1,400,000 residents on the islands, and many of them rent. Since it's not easy to find rentals, you can charge a bit more than if your property were on the mainland.
4. What Amenities Can You Upcharge For?
Some things in the rental can help boost the rental price as well. Things like an in-unit washer and dryer, new kitchen appliances, new kitchen countertops, and upgraded bathrooms will raise the value of the property.
5. What Are the Property Expenses?
How much do you spend to keep the property looking nice? Make sure to include this in the rental price or you'll lose money!
6. Stay Up to Date With Current Events
It's also important to keep up with local news that may affect rental prices. During a recession, renters can't afford to spend as much as when there's an economic boom.
7. Ask Other Local Landlords and Property Managers
If you're still unsure what to charge, get advice from those with more experience. A seasoned landlord or property manager knows what you can charge after a quick walkthrough.
If you want, you could even hire a property management company to help you manage your rentals as well and take a more hands-off approach! These companies have many rentals that they manage and often can offer things like maintenance staff in case something breaks.
Getting Real With Real Estate Profits
Most of the world's millionaires made their money in the real estate market. That's why so many Americans turn to real estate to increase their net worth!
Keep this article in mind every time you reevaluate your rental prices. That way, you know you're asking for a fair price for everyone involved.
We hope you enjoyed reading this article and that you learned how to set rent prices. If you have any questions about this article or if you're looking for a great property management company, contact us today!