Any time a landlord or an investment property owner asks us who sets the rent for the properties we manage, our answer is: you do. Every tenant and every landlord has a role in setting the rent as they begin to develop their relationship. The rental market also has a huge say in how much you can charge for renting out your property. In single family residences and condominiums, no one owns enough of them to set one price and have it be dominant. Likewise, tenants are on their own in shopping for properties and deciding how much a home is worth. This is truly a supply and demand model, and that’s the only way to judge the market.
If you are managing your own property and setting a price for that rental, a good starting point in virtually every city and community is Craigslist. Although the Craigslist site won’t tell you what the owner ultimately ends up getting in rent, it does tell you what price the owner offered. It’s a good starting place for you to begin developing your understanding of fair market rent in your area.
The right price almost always depends on size and location. Rarely does it have anything to do with granite countertops or Jacuzzis or stainless appliances. When you’ve got a single family home, you’ll get a good price on a four bedroom house because families need bedrooms for their children and they will likely need more than one bathroom and possibly a fenced yard for the kids to play.
If you advertise on Craigslist, you might get 25 calls in the first week, and that will seem successful. You might feel like you’ve priced your property correctly, and you’ll have no problem finding a tenant quickly. At Aborn Properties, our ratio is about 100 to 1. That means we believe it takes 100 calls to reach that one great tenant for your property. You want to get a good volume of calls, and if you aren’t getting that volume, you need to re-examine your price.
You do not want your property to sit vacant for even one month because that lost rent cannot be made up. Every day that your place isn’t rented is a day that rent is lost for good. When you set the price, be responsive to the market. If a lot of people are interested in the home and you have a good pool of applicants, you can be sure your price is right.
If you have any questions about how to set a rental price, please contact us at Aborn Properties.