Nearly 66% of Americans own homes, while the rest rent. Of course, landlords benefit from this, as there are always plenty of people looking for rental properties.
But the question is, how much should you charge for your rental properties? Calculating a rental property rate is a vital task for landlords, and they must do this for each property.
Fortunately, you can use various strategies to determine how much to charge. Keep reading to learn more about the best methods.
Consider Local Rental Rates
One of the best measures of rental price rates is local rates. How much are other landlords charging for rent in your area?
You can analyze these details by contacting property management companies. You can also gather details by reading rental property listings.
As you research the property market value of rent in your area, you’ll likely notice price variations.
These variations occur in different locations and apartment sizes. They also occur from various rental property conditions. But they can help you determine a good starting point for your properties.
Factor in Your Property’s Features
Next, you should factor in your property’s features. For example, if your properties are in better condition than the ones you viewed, you can charge more.
You can also charge more if your apartments are larger or include amenities. For example, do you offer free Internet services to all your tenants? If so, you can charge more for your units, as people will pay more for this feature.
Of course, you might want to charge lower rates if other apartment owners have nicer or more spacious units.
Use the 2% Rule
Some landlords base their rental prices on the 2% rule. This rule tells you several things.
First, it can help you determine whether to buy a rental property. Secondly, it can help you price the monthly rental amounts accurately.
To use this, look at the property price. Then, multiply it by 2%. The answer reveals how much you need to charge to make the investment worthwhile.
For example, assume you purchased a rental property for $100,000. If you multiply this by 2%, you’ll find that you need to charge $2,000 to make the investment valuable.
Hire a Management Company
Using these methods can help you determine how much to charge, but you might prefer hiring an expert for help. If so, hire a rent ready property management firm. They can help you price your units.
They can also assist with the management duties, including finding tenants, performing maintenance, and collecting rent.
Property management firms know how to determine monthly rental rates to maximize your revenue and profits for all types of rental properties.
Price Your Rental Property Accurately
Pricing each rental property accurately helps you keep your units rented and collect the most income.
However, calculating the prices to charge is somewhat challenging. You can hire a property manager to help you achieve this goal if you need help.
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