According to the Census Bureau, there are around 20 million rental properties in the U.S.
As of 2022, the real estate market has never been so competitive. Every year more homes are built and rented out to the public. So, you must price your rental apartment correctly to stand out from your rivals.
Determining the price of a home can be challenging if you're not a full-time real estate agent. However, it plays a significant role in whether you will make a profit from the property.
To help you out, our professional real estate agents will share five tips for pricing your rental.
1. Research Your Competition
Every successful campaign or financial investment involves thorough research. It will help you understand what people want from a property and how you can offer clients a better service.
A clever way to get insight from customers is by researching their reviews on their social media. If clients refer to their slow replies and lack of customer service, you have an opportunity. You can improve your service by setting a goal to reply to requests within an hour.
It's also necessary to examine their rental units. Uncover the rental price, size, location, amenities, and other factors influencing the cost.
2. Plan Out Your Costs
The best way to rent out your apartment or home is by offering a low price. However, if you don't know your costs and present a price that's too cheap, you could lose your cash.
Begin by calculating every expense on the property. From here, you know your breakeven margin. You'll also discover how much profit you'll make for any price you set.
Be sure to add these factors to your budget:
- Landlord insurance
- Maintenance of the rental apartment
- Property taxes
- Mortgage payments
- Utilities such as gas and electricity
- Property management fees
3. Understand the Size and Location of the Rental
Size and location play a significant role in the price of a rental. Additionally, they both work side by side.
Housing in New York is around 25% more expensive than in Salt Lake City. Thus a rental that costs $2000 in Salt Lake City will cost $2500 in New York, even if they're both 1000 square feet.
If the house across the street is 40% cheaper than yours, you will be priced out of the market. On the other hand, if your rental has twice the square footage of your neighbor, that can justify a higher price.
4. Highlight Your Amenities
Highlighting your amenities is the key to getting the most out of your profits. For example, studies show that the price of rental units with an elevator increases by around 120 USD.
Below are some of the most effective amenities that can boost the price of your rental.
- Swimmings pools
- Central location
- Nearby retail centers
- Schools and universities
- Number of bedrooms
- Parks and green spaces
- Views from the property
Make a list of the features that would attract a potential tenant to your property. Once you have everything, add it to your online ads where customers can see the amenities. You can even add some to the title of your listing to grab their attention.
5. Consider the Seasons
Hotels prices fluctuate throughout the year. During the peak summer season, hotels in Miami are up to 60% more expensive than in the fall or winter.
The same goes for property rentals. The most in-demand period for rentals is from May to September. During this time, property prices reach their height.
Fewer people move and relocate during the winter. So if you price your home above the average in your area, you'll find it hard to compete with your rivals.
You must review your rental price during the year.
Price Your Rental Apartment Accurately
There are plenty of factors to consider when you price your rental apartment. It also requires hard work and research to stay on top of the competitive market.
After reading this guide, you uncovered five tips from our real estate experts. So you know where to begin and the steps to turn yourself into a successful landlord.
However, if you need even more help, contact us today. We will provide you with a free rental analysis.