Ultimately, it should be your decision determining your rental price. The easy route for us to take is to simply agree with whatever price you choose without our input. This is a very difficult part of our job; being entrenched in the local rental market gives us great insights. However, our knowledge is of no value if we are not forthright with our owners. We have found that our investment knowledge gained over the past 20 years, both personally and professionally, is a significant asset to our investors. We provide all the necessary market facts and statistics to allow you to select the most effective price for your home.
If you happen to have an occupied property, you can “test the waters”. We can list the home on the market and see what the response is. We always monitor the number of showings and applications each property receives, as well as request feedback from prospective tenants that have viewed your property. At that point, with data in hand, we can adjust pricing accordingly if necessary. Having priced hundreds of properties over the years and seeing the actual results, both long term and short term, has given us valuable insights.
On the other hand, if you have a vacant property, time is money! Each day your property is vacant and on the market, it is money out of your own pocket. For example: a property renting for $1,800 per month, you are losing $60 per day. Effective management is a balancing act of keeping your price competitive enough to find a qualified tenant in a reasonable amount of time. Remember, if you choose to “test the waters” and your property sits on the market for 30 days at $1,800, you must give in to the fact that your strategy has cost you a full month’s rent ($1,800).
Your rental price is key to Property Performance and will ultimately determine whether your investment is profitable or not. If priced too high, you are likely to experience extended vacancies and fewer applications to find that quality tenant. In contrast, if priced too low, you may be leaving money on the table. We will create a rental pricing analysis specific to your property and review together.
“How long will it take to rent my property?” Good question. Based on property, location, condition, and price, we usually have a good idea of the time needed to rent your home. It is important to understand the approximate number of showings it will take in order to receive an application, as well as how many applications are needed to find a well qualified tenant to approve. It is a numbers game. By breaking it down in pieces, it is easy to see how important pricing is, and the time needed to find a quality tenant. For example: If you increase your rent by $100 per month it results in an annual increase of $1,200. If that monthly increase results in extending your vacancy by one month, and your rent is $1,800, your annual cash flow is reduced by $600.