How to Determine the Appropriate Price your Rental Unit

When you first start your journey as a landlord, you may come to a confusing stand still when it comes to determining the appropriate price for your property’s monthly rent. It may be hard to determine what price will give you the most profit but also what makes the most sense for the area that you’re marketing in. Doing a bit of research into what your associated costs will be and what market trends are currently happening can help tremendously when finalizing the perfect rental cost. Here are a couple of things to keep in mind when you are weighing your options:

What is the Market Like in that Area?

Many factors come into play when deciding what affects the price of your unit. One of the most obvious is what others are charging for their properties. Doing a quick search on Zillow, Apartments.com or even Facebook Marketplace can show what the typical price for other units in that same area are listed at. You wouldn’t want to price your apartment at $1,600 if the median rent for that same neighborhood is only $650. Unless of course there are sufficient reasons behind this, that we may mention later in the article.

What does your unit have to offer?

There are many amenities that your rental property may have that could increase the value of it. Amenities such as a gym, pool, or common area in the apartment can really raise the value by hundreds of dollars. You can even choose to include certain utilities or even all the utilities to be included in the rent, as well as even offer fully furnished options. These options can really increase the value and entice prospective tenants to your listing.

Where is your property located?

Location is everything when it comes to properties! If your rental is located at the beach front and just a mile from the city, it is going to be worth a considerable amount more than a property that is inland 30 minutes in a higher crime rated city. You can renovate the inside and outside, but if the location is not ideal, this will affect your rental price. Proximity to schools, museums, restaurants, and shopping are all things that can increase your value. Just as well as things such as jails, landfills and large industrial corporations can decrease the value. It’s important to be mindful of your surroundings when determining your price.

Cost of Area Maintenance

Another thing to keep in mind when determining your best rental price is accounting the cost of maintenance for the property. If you will be the one who will be handling all the lawn care and landscaping, cleaning of the gutters, parking lot maintenance and snow removal it is important to account for those costs. Once you determine the typical cost per month to maintain the property, you can include that in the cost of rent for the tenant, so that you maximize profits for yourself.

Focus on your Selling Points!

When you have determined your price, it is important to advertise the great things that come with that monthly cost so that the prospective tenant knows exactly what is offered. If your rent is a little higher than the market trends, make sure you state that this is because your unit is pet friendly, or has a 24/7 fitness center, that no other properties have to offer in the area. It is important to know your property’s worth and have the knowledge and confidence to establish why it is worth that.

As you have read, there are countless factors that come into play when determining your optimal rental price. If you put in the research and account for the cost factors that are associated, you are sure to end up with the perfect price.

If you are in need of assistance with your rental or in the market for a property management company that has years of experience in the rental industry, Goodman Properties has exactly what you need! For years, we have been the leading property management company for the Ohio Valley and we would love to help you! Contact our office at 740-695-3131 and speak with one of our property managers for more information!