At CRM Properties, we often get calls and questions about how we determine what a property will rent for. We also get many owners who tell us they want a certain amount of rent for their property.
We have a process to determine what a property will rent for, and getting that amount right is very important.
Gathering Market Data for Comparative Analyses
By managing nearly 500 properties in our market, we’re the rental property pricing experts. We know how long it takes for a property to rent and we know what the public is willing to pay for a home. In addition to that, every single property that we manage is classified in our software based on its location. We have to consider the property’s city and neighborhood. When we’re listing a new property on the market, we have comparable homes to consider when we’re pricing.
If a home has three bedrooms, one bathroom, and 1,000 square feet on the south side of Kokomo, we can see whether we have similar properties in our database. This helps us support the rental value we believe the property has earned.
Pricing and Time of Year
We look at other variables that will play an important role in determining rent amount, including the season. Obviously, early summer and spring will bring you rents that are a little higher than what you can get in fall or winter. Families won’t want to move during the school year and people are less likely to move when the weather is cold.
Consider Property Amenities and Updates
We also look at the amenities of the property. Is there something that stands out and is different about this property compared to the others? Then, we can determine how we will adjust the rental price based on the property’s amenities.
Updates are also important. The condition of the property is something owners can control; so make sure it’s in excellent shape before you rent it out. If there are newer things within the home, we factor that in when determining the rent.
Rent Price and Tenant Retention
You need to balance maximizing your rental income with maximizing the longevity of our lease. This is an important thing to consider when you’re deciding on a price. Do you want to get as much as you can or do you want to get the tenant to stay as long as they can?
Sometimes if you try to maximize the rent come close to pricing the home too high, your tenants will not stick around as long. They’ll move into the next property that comes along with a lower price tag. If you want to retain great tenants, you may not want to price the rent as high as possible. Instead, place it somewhere in the middle.
Ultimately, determining that rental dollar is very important to avoiding vacancies and keeping tenants for the long term. If you have any additional questions or if you are curious as to what kind of rent your property can get, please contact us at CRM Properties. We do offer a free rental analysis, and we can answer any questions you have.