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How much do you want to collect in rent from your property each month?
That's actually a trick question.
Setting the correct rental rate for your property isn't about how much you "want" to collect in rent. The right rental price for your property involves much more research than picking a price you might have in mind.
Deciding on the wrong rental price is one of the biggest mistakes you can make as a landlord. We don't mean to scare you, but it's important to set the right rate so you don't lose money.
What can you do to make sure your rental rate is the best for your property? We've got some tips to help landlords with this critical part of property management in Jacksonville, FL.
Why The Price Must Be Right
You're in the rental market because it's a long-term investment. As a landlord, you want to manage your properties so that they are profitable for the long-haul.
If the price for your rental property is too high compared to other properties in the area, your property will sit empty. You lose money every month that your property is vacant.
If the price is too low compared to other properties, you lose money every month on a too-low rent. You also won't make enough money to cover your expenses on the property.
The bottom line? It's your bottom line. Take the time to do the research to make the most money from your rental property price.
Ask The Right Questions
Your rental market research starts by asking the right questions.
You need to know how your property compares to other similar properties in the area. You also need to understand your out-of-pocket costs to manage your property.
Do your research to answer questions that include:
- What are the prices of similar rental homes in Jacksonville? Consider the square footage, number of rooms, and amenities that you offer with your property.
- How many rental homes are in the Jacksonville area? How many of these home are occupied versus vacant?
- What is the average number of days on the market before a home is rented?
- Of the total number of rental properties, how many are Single-Family Homes (SFH) versus Multi-Family Homes (MFH)?
- What is the average rent amount per square foot in the Jacksonville rental market?
- What is the average amount for a rental application fee?
- How much is your property worth?
When you figure out how your property compares to other nearby property, you'll have a good basis for knowing where to set your rental price.
Don't Get Greedy
If you had a higher price in mind for your property, but the data doesn't support it, resist the urge to raise the rent. Maybe you've added some great amenities that you feel justify your higher price. If that's the case, you might need to review the amenities and decide if they're necessary.
Amenities only add value to your property if tenants find them valuable.
You'll lose money holding out for a tenant willing to pay a higher price. It's more expensive to endure a month or two (or more) of no rental income than it is to lower the monthly rate to attract a good tenant.
It's not too late to adjust the rental price if you're struggling to find the right tenants for your property!
How do you know if your rental needs a price review? If you've experienced any of these issues:
- It's been three (or more) days since you listed your property and you haven't received any inquiries. The price might be too high.
- You've shown the property a few times, but the potential tenants never come back to fill out an application. Again, the property seen in-person might not support the high rent price.
- You get a flood of inquiries within the first few hours of listing your property. In this case, your price might be too low.
- Potential tenants are offering a deposit before they see the property or fill out an application. This might be a sign you've priced your rental too low.
One of the great things about being the landlord is you control the rent! Watch how people respond to your listing. Know that you can adjust the price until it helps you find the perfect tenants.
Don't Set the Rent Without the Research
It's worth the effort to use market research when it comes to setting the best rental rate for your properties. However, it might not be worth your time to pull all of that time together.
If you don't have the resources to answer the critical market questions, how can you inform your decision about the rent price?
Use the resources of property management companies in Jacksonville, FL. Green River Property Management has done the work for you! We know the Jacksonville rental market, and we have the resources to help you get your property on the rental market sooner rather than later.
Save time and earn the money you need through your investments. Get started with a FREE Rental Analysis to learn how much your property is worth!