One of the biggest decisions you have to make when renting your residential property is what price to charge tenants. If you price it too low, you leave money on the table, but price it too high and you risk holding a vacant property longer than you intend and bear all the associated costs.
Steven Ritter, Broker-Owner of Playa Realty & Management, LLC offers this advice.
Get the property looking good first. Is the grass green and landscaping well kept? Pool clear? Freshly painted? Start here to get a property “rent ready.” Skipping a few corners and renting for less money may sound like an acceptable maneuver, but you will also send a message that you may not care if the property is neglected. Prospective tenants will never know how good it is “supposed” to look. Ritter says someone touring the property should say “wow this is nice.” Anything less means you have more work to do.
Sometimes you can drive the neighborhood and learn a great deal of information, but it can be time consuming and you likely don’t immediately know the square footage, age of the appliances and other things that affect rental rates.
A better way to do this is to access the Multiple Listing Service (MLS) for detailed data at your fingertips. This is the preferred database for real estate professionals. Hiring a professional to market and manage the property is often money well spent as getting access to this database can give you valuable insight into the pricing of the community and how long it will likely take to find a tenant. Professionals like Ritter can give you a true indication of what the market bears by factoring in dozens of data points. Look for a minimum of 6 or so other rental properties in the area to compare.
Experienced landlords will tell you that getting the right tenant that respects your property and pays on time is perhaps even more important than the monthly rent figure. Proper care should be taken to do the needed tenant background and credit checks. A good rental management company like Playa Realty & Management, LLC can give you good advice, helps sort through the bad actors and get to the honest and trustworthy renter that can appreciate your property.
Ritter recommends to re-evaluate the property and go through the same valuation process every time a lease is close to expiration. In fact, Playa Realty and Management, LLC supplies a written report for clients to either confirm their rental rate is appropriate or recommend that an adjustment is made. Playa Realty & Management, LLC will also provide annual comparables for the sale of your property. They would be very interested in helping you with this transaction when the time is right.