As a landlord, you will have a lot of decisions to make and responsibilities to complete, and one important decision you will be faced with is how much rent to ask for each of the properties you have. Choosing the right rental price for each unit is vital, but it can also be difficult, and here are several things to understand about this.
The importance of choosing the right price
The price you put on your rental units has a lot to do with both your profitability and your occupancy rates. In order for people to rent the units, the prices must be in line with prices for similar units in the area. For example, if a one-bedroom apartment in your area averages around $800 per month, then your rent should be about this amount, as long as your units are equal in condition, size, and location. If you set the price right, you should have no problem finding tenants.
If you charge rates that are too high, you may struggle keeping your units occupied, as people would likely move to units that are similar but priced lower. If you charge too little for your rent, you will lose out on rental income and may attract a less-desirable group of tenants. As you can see, the price is vital.
Ways to determine price
One of the best ways to determine price is by checking out and comparing the costs of other units in your area. If you find other units that are similar, compare your apartments to these. If your units are nicer and more modern, you could maybe charge a little more. If your units are in a less desirable location, then you may need to charge a little less. You can also judge how well your prices are by looking closely at your occupancy rates. If you have high occupancy rates, it could be due to the price being too high. If you have a long waiting list for your units, then it could be because you are charging rent that is too low compared to comparable units in the area.
Solutions if you cannot determine the right price
If you are still having problems determining how much rent to charge for your properties, you could always ask for help. Residential property management in your area offer services for landlords, and they can help you choose the right price for all your properties.