When you are establishing a rental price for your home, the first thing you have to look at is what your neighborhood goes for. If you don’t live in the area anymore, that’s okay, you just need to have an idea of how that local market is working. When a new rental sign goes up in the neighborhood, call and ask about the price. Find out what kind of amenities are included with the home and see if everything matches up with your property. You need to know what other people are asking. This is information you’ll need in setting your own rental price.
There are a number of popular sites you can go to like Zillow and Trulia or HotPads or Craigslist. Be cautious about the information you find here. You can ask any amount you want, and when you look at Zillow or Trulia, you’ll see a lot of high prices for rental homes. That doesn’t mean they’re going to rent for that amount. We have seen people come down on their prices by $100 or $200 or even $300 just to get the place rented because they started out at the wrong price.
When you’re setting a price, call a real estate agent or a property manager and ask them to pull comps from the MLS. They’ll get a broader history in addition to what’s found on Zillow and Trulia. Remember that the most important number is what the homes actually rent for. You also want to know how long it took a particular property to rent. The asking price can really throw you off.
Asking for too much money will cost you money. If you start your house at $300 above market, there’s a good chance it will sit vacant for an extra 30 days or maybe an extra 60 days. You will have lost rent for two months and that could have been prevented if you had simply lowered the amount by $150 or even $300.
Be careful about chasing that higher dollar because it doesn’t always guarantee you’ll get a good tenant. A lot of people worry that if they price their property too low, they’ll get a low end tenant. That’s not always true. People who make good money and are responsible want to find a good deal and they are looking for something fairly priced.
Finally, look at the amenities in your house. If you have a pool, you might be able to get about $100 or $150 more per month in the Phoenix area. It won’t bump you up $300. A lot of people have granite countertops and three car garages and those features are great. It might help you rent your property faster, but it doesn’t mean you’ll get $200 more than the guy down the street.
Be cautious and be smart about where you start. The longer your property sits, the harder it is to rent. Start at the market rate or a little bit higher to give yourself some negotiating room. Don’t be out of bounds. You don’t make any money when your house is vacant.
Trust your professionals. If you need an expert opinion about the price of your rental, please contact us at HomeQwik, and we’d be happy to help you.