Do you want to learn how to price your real estate? And make your rental property stand out in the competition?
If so, you came to the right place.
According to the Census Bureau, there are around 20 million rental properties in the US. They range from cabins to mansions, modern to historical, and everything in between.
Renting one out can be a fantastic opportunity to make some hard-earned cash. But there are plenty of things to learn before you put a rental on the market.
Luckily you came to the right place.
So, read on to discover how much rent you should charge for your property.
Analyze Your Competition
As with every financial investment, you must know your competition inside and out. This will help you with the following:
- Understanding the customer's expectations.
- Acknowledging and improving your home's flaws or downfalls.
- Learning what makes your house better than the competition.
- This will enable you to set up your property rental at a competitive price.
Start by researching rent in your local area. A two-bedroom townhouse in Austin, TX, will cost 273.6% more than one in San Fransico, CA. So, discover the ballpark area of the cost of rent in your surroundings.
The key to making it work is comparing your rental to similar ones in the area. If a home in your area has twice the square footage and an extra bedroom, chances are your house should cost less.
Sell Your Features and Amenities
Your features and amenities will help increase the value of your property rental. That's why researching the competition in your area is crucial. A house in the vicinity might be bigger, but if yours comes with better features, you can justify a higher price.
Down below are features and amenities that can boost the price of your rental:
- Swimming pools
- Onsite parking
- Appliances such as a dishwasher and washing machine
- Outdoor space
- Community activities
- Walk-in closets
Once you identify the top amenities, highlight them when it's put on rental listings. You can even add a feature into the heading, such as "Fully furnished two-bedroom flat in Las Vegas."
Cover Your Expenses
There's no point putting in the hard work of researching your competition if you set a price that won't cover your expenses.
Many new landlords skip or forget about this simple yet effective tip. If you're not careful, you might lose money each month. You will need to increase your rent over time, and tenants won't be happy.
Make sure to include the following in your expenses:
- Property management fees
- Mortgage payments
- Repair and maintenance costs
- Landlord insurance
Once you know how much it costs to break even each month, you can put it towards the rent price. But don't forget, that isn't your final figure. You still want to make a profit.
The 2% Rule
If the monthly rent for your home is at 2% of the buyer's price, it should deliver a positive cash flow for you. So, if your property was $200,000, you should rent it for around $4,000.
But remember that is just a guideline. Plenty of other factors can influence the 2% rule, some of which include:
- Demand in your area
- Economic stability
- Seasons and time of the year
- The property's location
- The house's condition
The 2% is a great way to understand your property's worth. But it shouldn't be a substitute for everything else on our list.
Rent Your Rental Property Accurately
Rental pricing can be difficult, especially for new landlords. But after reading this article, you should know how to price your rental property accurately.
Figuring out how much rent you should charge is hard work, but the rewards are high. So clear your schedule and start with a free rental analysis in Las Vegas today!