Setting the right price for your rental unit can be tricky. You want to have a monthly rent that is fair and allows for you to make an income as well as maintain the property, but you do not want to overprice, or underprice the unit.
When finding the fair market value of your rental unit, the first step is to find out what similar rentals in the area are going for. Have a comparison of at least three similar properties available. They should be similar in size, location, and condition. You can obtain these yourself through our website, My Rent Rates, here. Or you can go to internet sites such as Zillow, or through partnership with a local property manager who will have access to the latest rental information on the multiple listing service or in their properties.
Fair market rent can vary depending on location, type of property, condition of property, and number of rooms. For example, a three bedroom house in a rundown neighborhood is not a comparable rental property to a three bedroom house in a new neighborhood of contemporary, newly constructed homes. An apartment in a four story walkup is not comparable to an apartment in a high rise with elevators.
Location is a major factor in determining price. Is your property located in a highly regarded school district, or a desirable town? You might be able to charge more, since the demand in those locations is usually higher. Similar units just a few miles apart can command very different rents if there is a difference in schools, school districts, or if they are in different towns.
What is the demand for rentals in your area? If you are in a high demand area, you can attract reliable tenants, and charge a higher rent. If your area is not in demand due to jobs leaving the area, declining schools, aging population, then you are not able to justify a rent that is as high as one for a similar space in an area that is popular.
What amenities are you offering? If the apartment has a great view, open layout, or features such as laundry on site, a pool or gym, or a common clubhouse area, those can justify a higher rent. Other desirable features include central heating and air, climate control, and the availability of storage or onsite garage parking.
The size of the unit matters a great deal as well. The number of bedrooms and baths will determine what the rental should be, and if multiple occupants can share a larger monthly rent.
Pricing your rental can be tricky. Be willing to make adjustments in price, and attempt some trial and error. Once you have the fair market rent determined, it is much easier to keep the unit rented and in demand.