Higher rental prices convey status, but prices that are too high will drive renters away. Similarly, if your rent is set too low, interest will wane due to the assumption that the unit must be unfavorable. The key to successful price-setting is finding that middle ground, ideal for the current rental climate.
Here are some tips to help calculate an appropriate rent for your property:
1.) Know your monthly expenses for the property. This should include any mortgages, loans, the average costs of maintenance or repairs, advertising fees, vacancy costs, screening or legal fees.
2.) Look in local newspapers and online advertising for properties that are similar to your rental property, and within a close geographic area. If you track these ads for several weeks, you will see patterns arise among the properties that rented quickly and those which did not. You will also be able to note any changes in asking prices. Identifying properties that rented within the shorter time range or adjusted price point, will give you a good idea for what is a reasonable asking price in the area.
3.) View available units in your area, compare features, and ask the landlord about the level of interest they have seen with the current price.
4.) Adjust your price based on the amenities available. Convenient location, favorable views, good parking, updates, square footage, floor level (upper level units are, generally, more desirable), closet space, etc. may all be cause to increase the price.
5.) Remember that you will not set the price for your property and then leave it unchanged, for the duration. By watching the market in your area, you will be able to adjust your pricing appropriately, and maintain high demand for tenancy.
A rent amount that provides market supported profit for property owners, is not evasive or difficult to obtain. By following the above tips and remaining open and aware of changes in the local market, you should have great success.