In a previous blog about getting your home rented quicker, I briefly mentioned setting an appropriate rent amount for your rental property. Today I wanted to expand on that, as pricing can be the difference between a quick rental vs vacancy loss.
What is Vacancy Loss? In short it’s the amount of money you are NOT getting due to the fact that the property is vacant, thus generating no rent. As an owner, you obviously do not want that. I’ll go over some ways you can hopefully avoid that scenario by setting an appropriate rent level.
- Evaluate the subject property.
- Location, square footage, updates/upgrades, condition
- Some of the variables, you can’t change, or it doesn’t make sense to change them. However, certain updates and the overall condition should be addressed and dealt with in order to make the property as functional and appealing as it can be for prospective tenants.
- Perform Market Research
- Take a look at comparable properties in the area with similar features, square footage, location, etc. and find what they’re renting for
- May require watching properties and keeping track of rent price, how quickly they get rented, or how long they are staying on the market. Certain online sites will actually tell you how long a unit has been on the market.
- If it’s in your best interest, it may necessitate a visit to a comparable property to get a feel for it compared to your subject property.
- It’s important that the comps you are looking at are current as the market is always changing; Going off of what a particular property rented for a year ago would not be the most up-to-date information, as it would more than likely command a different amount today.
- With the previous comment in mind, it’s crucial to understand that the price is ultimately dictated by the state of the current market – Greater demand will allow for higher rents, while less demand will mean lower rents.
If the previous steps are followed, the rental amount should be fairly clear with a little wiggle room in either direction
At the end of the day, owning rental property is all about maximizing the return on your investment. By doing your homework, you will be able to set a market-competitive rent, and in turn maximize YOUR return and lower your vacancy loss.
If you need any help managing your home, please contact us at Vision Realty & Management in West Georgia.