Rental properties are an excellent way to build wealth and steady income over a long period of time, but choosing the right price to rent your property can mean the difference between a tenant and a vacancy.
In this article, learn how to price your rental property, including tips on how to keep your rental property full with reliable tenants.
Rental properties can be a great way to generate income, but figuring out how much rent to charge can be tricky. If you charge too little, you’ll find yourself struggling to pay the mortgage, repairs, and other expenses for your rental property.
But if you charge too much, tenants will have trouble affording it, and if they do manage to make the payments, they might not leave the property in good condition.
So what’s the solution?
Well, there are a lot of factors that go into determining how much rent to charge.
You’ll need to consider:
- How long you plan on keeping the property
- What kind of neighborhood it’s in
- The property itself
- The condition of the building when you bought it
- Your relationship with your tenants
In order to get and keep your landlord career headed in the right direction, let’s look at some ways to assist you in knowing how much rent to charge in Boston.
Bring in a Professional
It’s a good idea to start off by determining if you feel it would be worth it to employ the expertise of a real estate agent. Consider the amount you’re willing to pay for a real estate agent. Real estate agents typically charge a percentage of the rent and security deposit your tenant pays, or simply 1-2 month’ rent once the transaction is closed (but this can always be negotiated).
The key to getting your money’s worth out of an agent is shopping around and finding the right one that will work for you. Meet face-to-face with multiple agents, fill them in on all of the details regarding the property, and pay attention to any questions, concerns, and attitudes they present throughout the meeting. At NextHome Titletown Real Estate, we are happy to set up an introductory call and perform a market analysis at no charge or obligation to you.
If you choose to go it alone, there are plenty of avenues that will lead you to knowing how much rent to charge without the help of an agent.
Carefully Consider Your Value
Just like selling a home, pricing your rent appropriately from the get-go is important to make sure you don’t find yourself waiting months to get a worthwhile tenant.
The key to finding that sweet spot for your rent is to establish the market value of a property. The market value is the estimated price that someone would be willing to pay to purchase the property in its entirety.
You can come to this value by looking at the closing prices of other surrounding and similar properties over the last few years. This data point is called your neighborhood comparables, or neighborhood comps.
Other points to keep in mind when searching for your market value are proximity to popular shopping and entertainment venues, schools, parks, emergency services, public transit stops, and primary commuter routes.
If you feel left not having any clue where to start once you have collected this data, it might be worthwhile to hire an appraiser to come to do a thorough appraisal of the property. It’s very important to remember that appraised value is not market value, but an appraised value can at least aid you with a bare-bones idea of your property’s value.
Monitor and Adapt to Interest
Once you have landed on a beginning rent price, either put your own or your agent’s marketing prowess to good use through your typical methods.
We highly recommend leveraging free and cheap online resources, such as Zillow and Facebook, to get the word out and generate interest quickly and easily. As your ads start to hit potential tenants’ screens, you’ll begin to get returned data suggesting if your ads are grabbing these individual’s attention or not, and you can edit to swing those metrics more in your direction.
A couple of the best ways to make a rental property listing more appealing to potential renters are to either spruce up the listing with a more complete photo set and text blurb and to look at lowering your rent.
There are few things that will help that listing do the talking for you than making your asking rent even more competitive.
Help Knowing How Much Rent to Charge in Boston
How much rent to charge when you’re starting out with a new rental property? It’s a tough question that plagues many aspiring landlords. The last thing you want to do is undercut your profit margin and give your hard-earned money away.
Knowing how much rent to charge when starting out with a new rental property can be easier when you contact our team at (617) 657-9811 for guidance!
Boston and Beyond – Just Hit the Market!
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