Two of the most important aspects of owning a rental property are minimizing vacancy loss and getting the best return on investment.
To do this, you will need to know how to determine the best rental price for your rental property and then how to develop a sound marketing plan in order to lease the property quickly and get it front of as many potential, qualified tenants as possible.
In this blog, we will outline how you can go about setting the most competitive price that gets you the best ROI, as well as key marketing strategies and tactics to implement in order to get your rental property to lease fast and minimize that vacancy time.
Setting the right rental home price is extremely important to renting your property. You want the price to be high enough to give you a solid return and cover your expenses, but not so high that you do not get any activity on it or tenants interested in leasing the home.
A good property management company or REALTOR ® can offer the following services, or you can choose to do it yourself if you feel up to it and confident about performing the following research and gathering methods in order to determine the best rental price for your single-family investment property.
This could be contrasted with leasing the home in the winter season, which is typically a much more “dead season” when rents may need to be adjusted downward by 2%.
Other ways to determine rent price could include this formula: Multiply your home value x .1% or .05% to arrive at a price so you can pay off your mortgage in 10 years to 20 years.
But again, be sure you are falling in line with current rent prices in the market.
The most important thing is that you are covering all of your expenses and generating a profit. Without having a good grasp of your expenses, it will be hard to set a good price. Also, you want to attract good, quality tenants. So set your price at market value to ensure your attracting the best tenants who will take care of the property well.
Property Management Companies are experts when it comes to price setting and screening tenants. They have vast experience based on all the rental properties they manage and access to paid resources that include better rental analysis and comps for similar properties.
Consider hiring a property management company if you do not feel confident with coming up with a price plan yourself or managing all the legalities and tenant/maintenance issues that come with owning a rental property and being a landlord.
The first and most important factor that will determine how quickly and well your property leases is what we just discussed above, and that is setting the right price for the market. If you set the price too high, you will see very little activity on the home, regardless of performing adequate marketing for the listing.
Next, the most important factor in renting the home quickly is the marketing of the property. If potential renters do not know about the home, or cannot find it in the places where tenants are most commonly searching in 2023, your home will sit on the market much, much longer than necessary.
To properly market your rental home, we have compiled a variety of promotional tactics M&D implements that you should consider implementing as well:
5. A good and easy showing system and tool is also important. Ensure the property is set up in a system such as Showing Time or Broker Bay via MLS. In addition, there is also always the option of doing Self-Guided Tours, which will also help you to gain traction and remove barriers for potential renters to see the property; tenants can schedule their viewings online and then use a temporary code to access the property.
A good property management company will perform all of the above in order to lease your property as quickly as possible and ensure you get a good return.
Duties of a property management company typically include setting the rental price based on all of their available resources, marketing the property through promotional efforts, including both paid and unpaid channels, handling all maintenance and repairs and budgeting for the property, ensuring the lease is enforced, performing regular inspections, collecting rent payments and so much more.
Property management companies typically charge a fee between 5% and 10% of rental income monthly based on the services they offer and the quality of the property management company. There may also be a small fee to lease the property for you, in addition to managing it.
Just think, on your $2,000 per month rental property, you may only pay an average of about $160 per month to not have to worry with any tenant screening, maintenance concerns, property issues, non-payment problems or concerns over whether you know enough to be legally compliant and correctly enforce your lease agreement.
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