When you are setting a rental price for your property, the most important thing you can do is to take a look at what has recently rented in your neighborhood. Once you understand the range of rental prices, be careful that your price is not on the highest end of that range or the lowest end. You want to be somewhere in the middle.
Real estate agents will be looking at your listing, and tenants will also go online to search for properties. When they see your price, you want them to feel comfortable that they aren’t paying above market rent if they decide to lease your house.
At Lorac, when we have a property on the market, we’ll keep track of the interest we receive. If we aren’t getting enough calls or emails for more information, we’ll know that the price is potentially too high. If we are able to get 10 or 11 people into the house to see it, but they don’t want to fill out an application, that’s another indication that the property is overpriced.
In a rental market, we reduce the asking price by $100 each time we come down. So, every two weeks if the property is not getting any showings or applications, we’ll reduce the asking rent by $100. That usually gets us more showings and if you get more showings, you have a better chance of reaching interested tenants who will make an offer. Just like with real estate sales, if you have multiple people interested in the same property, it’s possible to get more than the listed price.
The way to build wealth with rental properties is by pursuing tenants. Every day, you have to pursue those tenants and get them into your properties. This means responding immediately. Answer every single lead and pick up the phone every time it rings. You can’t have people leaving messages. You have to answer that phone or return a call within minutes. With the internet, people can move onto other properties quickly. You don’t want that to happen.
If you have any questions about setting a good rental price for your investment home, please contact us at Lorac Realty and Property Management, and we’d be happy to give you some free advice.