We often get questions from owners regarding how much their home is worth on the rental market. As always, the answer is, “it depends”.
There are a lot of variables that go into pricing. Besides the obvious – how many bedrooms, how many bathrooms, is it a ranch, how big is it, and what school district is the home in – you also have to take into account how new the home is, how well it shows, and what is the competition doing.
One thing to always keep in mind is that I don’t set the rent, you don’t set the rent, and your mortgage payment certainly doesn’t set the rent. The market dictates the rent that a good tenant will gladly pay. The tenant you want in your rental home is one who will maintain and improve the house and grounds, pay the rent on time, get along with the neighbors, stay for a long time, and generally be able to handle things on their own. These kinds of tenants are worth their weight in gold. We’ve succeeded as property managers if we can attract one to your home.
So – what does it take to find one of these top-notch tenants? First, we know we can’t put good folks into bad houses and expect them to be happy. That’s why we evaluate every property extremely carefully with the owner, to make sure it looks nice, smells nice, and feels like home. New paint, a freshly cleaned carpet, and a thorough clean and shine are often all it takes to care for the inside of a home. Sometimes we’ll recommend strategic upgrades if we’re seeing a rental home for the first time – updated lighting fixtures are relatively inexpensive, and can make a world of difference.
Obviously, there needs to be some curb appeal to the rental property if we’re going to attract the best applicants, so the grass needs to be mowed while in season, and the bushes need to be neatly trimmed – overgrown bushes don’t appeal to anyone!
So - if the property is fixed up right, and marketed right, the last piece of the puzzle to attract great tenants is, is it priced right? Our job as property managers is to maximize the rent a rental property will generate, but what we want to maximize is the NET rent – not the gross rent. The net rent is the amount of money the property will generate – rent, minus repairs, expenses, and vacancy.
We find that by putting the right tenant in place up front, we can minimize repair costs and vacancy. If that’s the case, we can strategically ask for a lower rent in order to attract as many applicants as possible. That gives us a good pool of applicants, and we can choose the best of the best.
On every vacant rental home we have, we’ll do a comprehensive market survey of what’s being advertised at that moment. We try to find the midpoint of the range, and then discount the rent a bit more from there – not lower than the market, but slightly less than midpoint.
The combination of great advertising, an attractive price, and a home that show beautifully generates a lot of call volume. Sometimes the first tenant who applies is a great fit, other times we’ll go through five or six applicants before we get to the right one. The important thing is, we’re not looking for first-come, first-served, we’re looking for the best qualified. They tend to minimize expenses by taking great care of the home, and staying for multiple years.
There are a lot of variables that go into pricing. Besides the obvious – how many bedrooms, how many bathrooms, is it a ranch, how big is it, and what school district is the home in – you also have to take into account how new the home is, how well it shows, and what is the competition doing.
One thing to always keep in mind is that I don’t set the rent, you don’t set the rent, and your mortgage payment certainly doesn’t set the rent. The market dictates the rent that a good tenant will gladly pay. The tenant you want in your rental home is one who will maintain and improve the house and grounds, pay the rent on time, get along with the neighbors, stay for a long time, and generally be able to handle things on their own. These kinds of tenants are worth their weight in gold. We’ve succeeded as property managers if we can attract one to your home.
So – what does it take to find one of these top-notch tenants? First, we know we can’t put good folks into bad houses and expect them to be happy. That’s why we evaluate every property extremely carefully with the owner, to make sure it looks nice, smells nice, and feels like home. New paint, a freshly cleaned carpet, and a thorough clean and shine are often all it takes to care for the inside of a home. Sometimes we’ll recommend strategic upgrades if we’re seeing a rental home for the first time – updated lighting fixtures are relatively inexpensive, and can make a world of difference.
Obviously, there needs to be some curb appeal to the rental property if we’re going to attract the best applicants, so the grass needs to be mowed while in season, and the bushes need to be neatly trimmed – overgrown bushes don’t appeal to anyone!
So - if the property is fixed up right, and marketed right, the last piece of the puzzle to attract great tenants is, is it priced right? Our job as property managers is to maximize the rent a rental property will generate, but what we want to maximize is the NET rent – not the gross rent. The net rent is the amount of money the property will generate – rent, minus repairs, expenses, and vacancy.
We find that by putting the right tenant in place up front, we can minimize repair costs and vacancy. If that’s the case, we can strategically ask for a lower rent in order to attract as many applicants as possible. That gives us a good pool of applicants, and we can choose the best of the best.
On every vacant rental home we have, we’ll do a comprehensive market survey of what’s being advertised at that moment. We try to find the midpoint of the range, and then discount the rent a bit more from there – not lower than the market, but slightly less than midpoint.
The combination of great advertising, an attractive price, and a home that show beautifully generates a lot of call volume. Sometimes the first tenant who applies is a great fit, other times we’ll go through five or six applicants before we get to the right one. The important thing is, we’re not looking for first-come, first-served, we’re looking for the best qualified. They tend to minimize expenses by taking great care of the home, and staying for multiple years.
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