Is Your Rental Property Underpriced?
Is your rental property underpriced? Many of you reading this article may not know, but by adjusting your rental property’s rates to the market’s rates, you can make thousands more. This ensures that you’re not renting out to people who are penny-pinchers or who simply couldn’t afford it in the first place.
Let’s say that your property was underpriced by $300/month. A raise in rent according to market prices would yield you $3600 in a year, and $36000 in ten years. No one can afford to miss out on that much money!
But the question arises, how do you know whether your rental property is underpriced or not? Well, these four indicators that I’ve listed below can be very helpful. Let’s start.
Know the Local Market
If your rental lease is coming up for renewal soon, I would suggest that you check out the local real estate market and see the current rates. A property management company can help you get comparable rates and analyze them for you.
Don’t Trust Automated Estimators
While automated property estimators are good to know, they don’t represent the accurate price of a property and tend highly to over or under-estimate a property’s value.
Another reason why you shouldn’t trust automated estimators is that they don’t consider how many houses are on the market at a given time and what the trend is.
Do You Have A “Quiet” Tenant?
Some tenants tend to be overly quiet. You might be thinking that this is a good idea that they aren’t causing you any headaches, but it isn’t what you think! They know the rental market better than you and are paying less than the market, and their silence is to conceal these facts!
Now this doesn’t mean that every quiet tenant is paying less. Some people just keep to themselves and do not like to cause their landlords any trouble.
Meanwhile, others stay under the radar, pay less, and when they do move out, you discover that your property is ruined. This could’ve been partially (or in some cases, completely) offset if this tenant was paying the market rate.
Consulting With Local Realtors
Finally, it goes without saying that consulting with local realtors will give you the best idea of whether your rental property is underpriced, overpriced, or at the market’s level.
This way, you’ll be able to repair and rent it out easily, while getting the rates from your tenants that you deserve.
Summing Up Is Your Rental Property Underpriced
Knowing what the current market rate is, consulting with local realtors, having overly-quiet tenants and not over-relying on automatic estimators is the key here.
Also, please note that if you do intend on raising the rent, let your tenant know far in advance so they may be prepared for the increase, or vacate, and also to comply with city and county regulations.
Conclusion
Are you looking for a qualified property management company in your local area? Superior West Property Management is the Inland Empire’s leading firm in both experience and customer service. We take pride in maximizing profits for our clients while balancing the needs and comfort of tenants. It all starts with a comprehensive property onboarding process followed by targeting marketing and a thorough tenant screening. Our experienced property managers handle every aspect of day-to-day operations and offer a 24/7/365 approach to rental property emergency maintenance. Call us today to find out what our professional property management services can do for you.
