Are you going to be a landlord for the first time? You might be confused about how should I value the rent of my property? Being a landlord, one needs to understand that the key to landlord success begins with determining the rental rate for the property that is “not only profitable for a property but also competitively priced to attract tenants.”
Determining the rental rate can be a bit challenging. Some of the great resources offer some excellent general advice on how to price your unit based on the value of the property and the number of units you plan to rent.
Some of the factors that will help you in determining rent to be charged are: –
Location plays a massive role in determining the rent of the property. A property located in a higher-income area will demand high rent compared to the one located in the middle to the lower-income neighborhood.
Unit size & desirability
The size of the property also plays a vital role in determining the rent of the property. A property with more space can command more rent than a smaller unit. The desirability of the unit itself; is it a ground-level unit or an upper-level unit?
What can the market bear?
If you live in a central metropolitan area, it is expected that rental fees will be much higher than if you live in a smaller town. There is high demand for good rental properties in large cities, so the markets in these cities can bear much higher rates than small-town markets.
However, this is one to watch as things can fluctuate. While large markets can bear higher rates, other factors can affect these rates, such as high unemployment or a large influx of new people, both of which will impact rental rates.
Some of the minor factors are: –
Furnished or Unfurnished
If the property is furnished for obvious, it will charge a higher rent than unfurnished property in the same locality.
This factor is necessary for a residential house that how big is the surrounding area, is there any garden or swimming pool, etc. Answer these questions to see if you should charge more or not.
Garage or Parking
Is there any facility for parking vehicles? This facility is a must when the property is situated in the busiest part of a busy city.
In the case of a pet-friendly landlord, two options can be used- Can set the same price for tenants with and without pets but ask pet owners to pay a particular pet deposit. Can charge a higher monthly fee to tenants who have pets while maintaining the standard security deposit.
Separate or Private Entrance
For some people, private entrance is a need. They are ready to pay a slightly higher amount for that.
Including utility charges in rent will not only be more comfortable for tenants to make one monthly payment, but it will also protect you from situations when delinquent tenants fail to pay utility bills for many months in a row.
One should consider all these things while determining the rent charged for the property. If still confused or you have some questions in your mind, you can comment and ask your queries.