Pricing Your Poway Home to Rent

Owning a rental property is a great way to earn extra income. But if you don’t know how to set the right rental rate, you could miss out on opportunities to maximize your profits. This is the reason why knowing how to set the right price for your rental is one of the most important steps in property management.

At Halcyon Real Estate we believe setting the right rental rate is critical, which is why we have put together the following article.

Factors That Can Affect Rental Rates

Setting the right price is crucial. But it is also one of the most challenging tasks of being a DIY landlord. There are several factors that you need to consider when it comes to pricing your rental property correctly.

As a rental property owner, it’s important to be familiar with the following factors to help you set the right rate for your rental home, such as the following:

• Demand for rentals: The demand for rentals in your area can greatly affect the rental rate you can charge to your tenants.
• Available competition: The “competition” are those rental properties that have similar features as yours located within the vicinity or near the place where your property is located.

• Economy: In general, the local economy has a great effect on the rental market. If the economy is good, the population will most likely rise, and this can create an increase in rental demands.
• Amenities: Usually, property owners who offer more amenities have more reasons to price their rental homes higher than those who don’t. You can also add value to your rental home by offering other features that are not usually offered by your competitors.

How to Price Your Rental Home Correctly

Now that you know the factors that can affect the rental rates, the next thing that you need to do is to find out how to price your rental property correctly. As mentioned, setting the wrong price can be detrimental to your rental business.

If you set your rental rate too low, you may not be able to maximize your income potential. Also, rental properties that are priced right tend to attract happy tenants that are less likely potentially turn problematic.

Similarly, pricing your rental home too high can also be dangerous. Overpricing a rental property means you’ll limit your potential tenants to those who can afford your rate. By doing this, you may miss out on opportunities to rent your property as quickly as possible.

The following tips can help you set the right rate for your rental home:

Analyze the Market

Before you price the property, it’s essential to study and analyze the market. To do this, you need to gather data for other comparable rental properties. So, you’ll have an idea of how much other landlords are charging.

When finding a comparable rental property, make sure to focus on properties that are similar to yours. You have to consider the following factors:

• Neighborhood: The comparable properties should be located within the same neighborhood as yours. If not, they should be at least near where your property is located.
• Property types: When comparing properties, make sure you’re comparing similar properties. This means that you cannot compare the price of a single-family home with a multifamily unit. The same goes for a townhouse complex and a condominium unit.
• Property size: Also consider the size of the rental properties that you are comparing yours with. Of course, you may not get the exact same size—but just make sure to get something closer. Also, consider the number of bedrooms and bathrooms.

Assess the Value of Your Property

After looking at other rental properties and how much your competitors are charging, the next thing that you can do is assess the value of your rental property based on your amenities. The rule of thumb is to charge rent based on how desirable the property is.

Here are the factors that you need to consider when assessing the value of your rental home:

• View: If you own an apartment unit, consider the view of the unit when pricing your rent. The one with a garden view has a higher value than the one without a nice view.
• Appliances: Do you provide appliances? If so, are they new? You should also factor this in with your pricing.
• Other features: Does your property have more than one slot of parking space? Consider other features that may add value to your rental home.

Work With a Property Manager

If you are not sure about how to price your rental home correctly, the best course of action is to seek professional help. Working with professional rental property managers is a practical idea. Not only can they help you set the right price for your rental unit, but they can also help you screen the right tenants.

When choosing a rental property management company to work with, make sure that they are knowledgeable of the rental market where your investment property is located. Knowing the rental trends in your area is an important factor that can help you decide on the right rental rate.

Bottom Line

Experienced property managers are well-equipped with important information about rental trends, so you can be assured that they can help you maximize your ROI.

Moreover, since market demand determines the right rental rate, you need someone who is constantly updated with the status of the rental market. Working with a reliable property manager takes the guessing game out of the equation.