Property managers price rental properties on a daily basis, and we know within a hundred dollars what a particular home will rent for, and how long it will take to find a qualified and interested tenant. As a landlord, when you’re pricing your rental, you need to pay attention to the local rental market.
Just like in the sales real estate market, there are a lot of variables to consider when you’re pricing your rental home. You need to consider the upgrades in your property and here in southern California, we also consider the proximity to the ocean and the school district when we’re determining price. All houses are not created equal. A property half a mile closer to the beach will rent for $500 more per month than an identical property that isn’t near the water.
Any commodity is priced based on what the market will bear. Some property owners have unrealistic expectations for their property, and they want $3,000 for a $2,500 property. They might get that price eventually, but it could take eight or nine months to find a good renter who is willing to pay that price. It’s our goal to price a property competitively so it minimizes the vacancy time and we can get someone in there as quickly as possible.
Just because you rented a property in 2015 for $2,000 a month doesn’t mean it’s worth $2,000 a month in 2016 or 2017. In this industry and this market, rents are always going up. Staying on top of that and making rental increases is important. Your property taxes and insurance are likely increasing as well, so
you want your rental income to keep up. A lot of landlords will get a tenant in the home to cover their mortgage and their taxes and insurance, and then they never increase the rent. Their costs of property ownership continue to rise, though, so they end up losing money.
We call our owners every ear to talk about the market trends and where rents are going in their areas. Then, we decide what to do and whether a rent increase is necessary. We’d be happy to help you as well, so contact us at Real Property Management with any questions.