Rental value can be an emotional topic. A lot of rental property owners come to the market with a specific idea of how much their home is worth and what they want to earn. There are a lot of factors that go into accurately pricing a rental property, and one thing that doesn’t matter, unfortunately, is what you want to earn. You have to price your rental property according to the market. Otherwise, you’ll find yourself with large vacancy costs and less-than-desirable tenants.
When you’re deciding what to charge, take a look at what comparable properties are renting for in your area, and consider the other factors that influence your property’s rental value.
Property Location is Important
You don’t have to be a real estate investor to know that location matters. You’ll be able to charge more when your property is in a desirable location. If you’re close to good schools and shopping, you’ll find that tenants are willing to pay more. If you’re in an area that’s more remote and it will take an hour for people to commute to work or get to the grocery store, you won’t be able to charge as much.
Property Condition and Features
A well-maintained home will always rent for more than one that’s old, falling apart, and neglected. Make your property desirable to good tenants. Provide some curb appeal and make sure it’s completely clean. Consider investing in minor but important upgrades such as better lighting, a hard surface floor, or even energy-efficient appliances. If a home feels bright and modern when a prospective tenant walks into it, the price can be on the higher end of the rental range and you’ll still find a good renter.
Unique features can also help you rent your property for more. Perhaps you’re in an HOA with a pool and a fitness center. Maybe there’s a double sink in the master bedroom or a walk-in closet in the second and third bedrooms. These things can raise your rent, and you should promote them when you’re marketing the property.
Size and Season with Rental Pricing
Size matters, too. Tenants are looking for homes that are spacious but not too troublesome to maintain. A three-bedroom and two-bathroom property with a garage, yard, and plenty of storage space is usually standard for single-family homes. Sometimes, if you’re renting out an apartment or a condo, a one-bedroom and one-bathroom unit is exactly what people are looking for. Usually, the larger the home, the larger the price tag. But, the condition and location indicators will often impact price more than the size.
Rental pricing can be seasonal. Most tenants are looking for new homes in the spring and summer, especially families with children who will need to be enrolled in a new school before the academic year begins. No one wants to move over the holidays or in the dead of a Colorado winter. So, your prices may need to come down if your home is vacant in January or February.
These are the most important factors that can help you price your home. We have extensive data that reflects the rental market in Lakewood and the West side of the Denver Metro area, and we’d be happy to share it with you. Contact us at Assured Management for more information.