You may have noticed that your For Rent sign has been sitting out in the yard too long or your online rental listing hasn't received many hits. While there are several possible reasons why you are not getting much of a response from prospects, one of them could be that your rent is too high. In fact, your high rental price is what may have driven your last tenants away.
How to Assess If Your Rent is Too High
If your rental price is too high, you will likely experience the following with rental prospects:
- There are no inquiries within the first 36 hours of listing a property.
- You receive some inquiries, but no one requests to see the property.
- Prospect who view the property never take the next step beyond the viewing.
What the prospects are telling you (either in word or by inaction) is that the rent is higher than they expected to pay for your property.
Before you instantly reduce the rent, however, you can take a more calculated approach toward determining how much rent you should charge for your property. In the property management industry, this approach is known as a rental analysis.
What is a rental analysis and how does it help you determine where you should set your rental rates?
Rental Analysis: The Key to Setting Your Rent
A rental analysis can help you pinpoint the value of your property, which, in turn, will help you establish an appropriate rental rate. How do you get started with a rental analysis?
1. Assess the Neighborhood
When you schedule a consultation with an Everest property manager, one of the first things we help you assess is the viability of the neighborhood and the area in general. We look for neighborhood assets that will help you establish where your rent should be. Some key assets you want to consider include:
- Renter access to public entities such as parks, transportation, or businesses
- Proximity to schools and educational facilities
- Nearby amenities and attractions
- A safe neighborhood with a low crime rate
2. Identify Properties That Compare to Yours
Next, we can utilize our online resources to find properties in the neighborhood that are similar to yours. We can find properties that have the same square footage, number of bedrooms & bathrooms, lot size, and same condition.
By identifying similar properties, we can then see what landlords are charging for rent. This will help you gauge what your rental rate needs to be.
3. Review Your Amenities
You may be either overselling or under-emphasizing amenities on your property or in your area. If you are a new investor with one or two properties, you may not realize that you can highlight certain attractions or features in your area as amenities.
Local area amenities could include:
- Recreational attractions
- Nearby retail outlets or malls
- Spa or gym
A local amenity is any desirable or useful feature or attraction that a renter would have convenient or walk-able access to by living in your rental. Our property management team can help you identify local amenities and property amenities that support the rental rate that you set while attracting prospects who are willing to pay it.
Likewise, we can also help you determine if you need to add some amenities or lower your rent if you can’t or won't invest more money into your property.
4. Calculating Price Per Square Foot
In addition to assessing the area and your property, you may also want to re-calculate the price per square foot of your property. This is a simple calculation that can help you re-evaluate your rental rate.
For instance, let's say that a comparable property in your area is renting for $1,600 per month and it has a total area of 1,000 square feet. To find the price per square foot, simply divide $1,600 by 1,000. The price per square foot comes to $1.60. Now multiply $1.60 times your property's square footage to an adjusted rental rate. If your property has 1200 square feet, then you would adjust your rent to $1,920.
Keep in mind, that the price per square foot is only part of the entire assessment. Once we factor in location, property condition, amenities, and other variables, the rental rate could increase or decrease accordingly.
Property Management Services in Palm Coast
Everest Property Management is a Palm Coast-based company that helps people find homes to rent and manages properties for real estate investors. We work with investors to identify investment opportunities in the Palm Coast area. By partnering with our property management experts, you can get a higher ROI out of your property.
To find out more about our products and services, call us at 386.246.2085. You can also message us on our contact page.Read This Before You Lower Your Rent-read This Before You Lower Your Rent