Choosing the correct rental price for your property
Writen by: Bob Nastasi
Setting the correct rental price for your property is one of the most important steps when it comes to getting your home rented out quickly.
There are many factors we need to consider when choosing the right price. Some of the main ones are as follows.
- Current values of comparable units in the area,
- Assigned schools,
- Environmental issues such as neighborhood or parking restrictions
- And property age/updates.
Based on the current trend rental values in the South Bay have declined in the last couple of years. This is a result of more new construction housing becoming available. It especially affects condos and townhouses. The decline is not drastic but some of you might notice that you haven’t been able to rent your home for more than you did a couple of years ago or in some cases even less.
How much can I rent my house for?
I know some of you feel that it would be better to set a price and wait until you find someone willing to pay. Losing weeks with no renter in your home can in most cases even out with just reducing the rental price. Here is my example.
Let’s say the owner wants the rent to be $3900 but A to B has market research indicating the value should be $3600. The normal marketing time should be 30 days if the home is priced properly but since the rent is too high it now takes 60 days to rent. The loss on this is $3900. ($3900 X 10 months = $39,000 for the year. $39,000/11 months = $3545)
This means the unit could have rented for $3545 and it would have netted the same result. But it would have rented faster and resulted in less frustration.
We recommend being very aggressive about the marketing price. As such, we advertise our properties for rent on over 40 different websites. We accommodate days and times for showings with all prospective renters and respond to all inquiries promptly.
If after a week on the market the interest is low we recommend reducing the price immediately.
Letting your property sit on the market for longer will damage your marketing efforts in the long run. The reason is that most of the interest comes in the first week or two of the property becoming available. Interested tenants for your area are already looking for a rental property and they will be alerted when yours becomes available. If your price is way above what is reasonable for the area you will lose their interest immediately.
It is important to remember that renters are savvy and are the best judge of the rental value. After all, they are the ones actively looking online at all of the available options in the area!
