How Does A Property Management Company Know How Much To Charge For A Rental Home?
Posted on: 8 December 2016
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Pricing a rental home correctly is extremely important. If you are asking too much rent for your rental home, prospective tenants may pass it over and it could sit empty. If you do not ask for enough rent, you could be losing out on money every month. A property management company can help you with all of your rental home needs, including properly pricing out the home. Here are a few of the tactics that a management company will use when determining how much you should charge for a rental home.
Looking at What Other Homes in the Area Are Renting For
One of the key things that a property management company does when pricing out your rental is looking at what other homes in the area are renting for. They may be renting some of these homes out for other clients or they may pull up the newspaper, online classified ads or other resources to determine what rental values are in your area. Just like with the real estate market, comparing the price of comparable rental houses is a good way to gauge what fair market rental value is for your home.
Getting Feedback From Prospective Tenants
Another thing that a property management company will look at when setting the price for your rental home is what feedback prospective tenants have given. Most prospective tenants will tell a property management company what they did not like about a home they decided not to rent. They may tell the property manager they think the home is priced too high or does not have the amenities they are looking for. If foot traffic is low in your home and/or prospective tenants think the price is too high, the property manager may reduce the price to try to make it more enticing.
Looking at What is Included for the Price
The last factor that will affect how much a property management company charges for a rental home is what is included in the price. If your rental includes utilities, comes furnished, or has other amenities, such as the use of a community pool or gym, you can typically get more in rent than a home that does not have these features. A property manager will carefully determine the value of these items and price your home appropriately based on these add-ons.
Pricing your rental home correctly can help you maximize the amount of profit your investment property makes. A property management company can help you properly price the home by looking at comparable rental prices in the neighborhood, getting feedback from prospective tenants and determining the value of extras that your home may offer that offer rentals may not.