Pricing a rental property is a key step in being successful in investing in rental properties. Pricing the monthly rent too high will decrease the amount of tenants willing to pay for the property but having too low will cause investors to miss out on additional revenues, or have a loss. There are a few key factors that need to be considered in order to accurately gauge what the price of the rental property should be per month.
If the investor is not located in the same area as their rental property, this may be a detriment in their ability to correctly price their rental. The market rent for a studio apartment in Las Angeles may be the same price as a 3-bedroom single family home in Reno. There are also many other factors to consider when pricing the rent besides location such as the number of bedrooms, number of bathrooms, amenities, storage space, or allowing for pets. If the rental is furnished or includes any additional items, this will also completely change the rental price.
Not only will location in the country will change the market rent, but location within a region will also dramatically affect it. If the rental is near amenities, close to retail centers, or is in a sought after neighborhood, tenants will pay a premium for the property. The investor should go into the rental property’s neighborhood to gauge the value of it themselves. Interacting with other people in the neighborhood will also allow them to get a better understanding of the area.
Rent Comparison Tools
There are many rent comparison tools that allow investors to see how they fair in the market. There are many free sites such as Trulia, RentBits, Rentometer, Zillow, and City-Data.com. Zestimates tend to be fair for rental prices. Using the tools available online will be a great asset.
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