by Justin Cory
on Thursday, December 23rd, 2021 at 10:20am.
Wondering how much you should price your Clarksville property? The rental pricing of your property can determine the success of your real estate investment.
If you price your home too high, you are bound to experience a high turnover of tenants in the long run. You also risk seeing long periods of vacancy which can very costly. On the other hand, rental prices that are below the market will reduce your ROI. In addition, you might not be able to meet your financial obligations such as mortgage payments and insurance premiums.
To get you on the right path, the team from Cory Real Estate, a leading property management company in Clarksville has put together the following tips. With the right rental price, you are bound to enjoy stable and long-term returns from your property.
If you want to learn how to set the right price, keep on reading!
The Importance of Comparables
If you are a new landlord, then you must research rental prices in your area. If you are still not sure of how much to price your Clarksville home, focus on your competition. Look up rentals that are similar to yours as these are known as comparables.
In your search for comparables, consider the following:
The neighborhood - Only take into account properties that are in the same part of town as your rental. Rental prices should be more or less similar since benefits accruable due to locational advantages or amenities are equal.
The number of bedrooms and bathrooms - If you have a 2 bedroom, 2 bath rental, comparing it to a unit half that size will not give you an accurate rental rate.
The type of property - Single-family residence rentals are in higher demand and can command a higher rental price than a unit in a multi-rental property.
The age of the property - Tenants are willing to pay more for a new construction. A newer rental typically looks better and has fewer maintenance and repair issues.
You can also choose to make use of rental listing websites such as Zillow, Hotpads, and Trulia to get an idea of prices. If you want a close-up look at competitions amenities, you can check the apartments in person. Ask the landlord about the level of interest. This can also give you a feel for the market and help you price your rental.
Advice from a reputable property manager in the area can come in handy. Their experience and property knowledge will give you a proper opinion of the market and an idea of how to proceed. They can also advise you on how to tackle other issues such as lease preparation and tenant screening.
Rental Price Adjustments
There are no two units that are the same. Even if you find a comparable on the next street over, you must adjust the rental price to meet the amenities and features that your Clarksville home offers.
For those property owners with multi-rental properties, this aspect allows you to consider the desirability of a unit and to charge appropriately. It’s recommended that you set and adjust the rent of your property based on:
The features and amenities offered - The unit with a new shower, polished floors and a new coat of paint should be priced higher.
The view - Do any of the units offer a view of the city? The tenant leasing that space should pay more.
Layout - Some house layouts are less desirable than others such as railroad style.
Total area - Without a doubt, a 1200 square foot one-bedroom commands a higher rental price than an 800 square foot one bedroom.
Floor level - Tenants prefer higher floors than lower ones for home security purposes and reduced noise levels. This rule however doesn’t apply after the third floor due to the walk up and down the stairs.
Storage - Extra storage in the form of an attic or basement makes the unit more desirable.
While the property is a highly regulated market, it’s still a commodity that is susceptible to the forces of supply and demand. There will be times when the demand will be high giving you chance to take advantage of it. However, there will also be times when you need to adjust the rental prices lower.
That said, setting rental prices is not a one-time solution. As a landlord, you will need to keep an eye on the property market and the other drivers that affect property e.g. population, inflation, employment numbers in the city, and the law.
For example, if the economy is in a recession, smaller apartments may be in greater demand as many households downsize to cut down on costs. In the summer, the demand for single-family residences and larger apartments can be greater as families move before schools reopen.
When you foresee a greater demand for your particular rental type, you can charge a higher rental unit.
The Right Rental Amount
Different investors indeed have different goals when owning and leasing property. However, regardless of the goal, the rental price is an element that cuts across the board.
The right rental amount should be able to cover the rental’s expenses and other costs. The rental price that you request should be able to cover:
From the information detailed above, you can appreciate the amount of work, resources, and expertise required to manage your rental property. If you find this daunting, rely on the experience and skills of the #1 property management team in the area!
As the premier property management company in Clarksville TN, we know of the importance of keeping up with the times. Cory Real Estate uses both orthodox and modern technology-driven approaches to offer our clients customized solutions. Contact us today to learn more about our property management services.