When you have a rental property, the first thing you need to decide is what you’ll charge someone to occupy your property. How will you come to that decision? Most people read the ads and see what homes or apartments of a similar size are renting for. But that really isn’t going to tell you what you need to know.
Unless you’ve seen both the interior and exterior of the properties, you don’t know how their condition and location compare to yours. And of course, condition and location play an important role in how much someone will pay.
Fair market rent will also depend upon a few other factors. Will you furnish the appliances, or do they need to bring their own? Can they get a satellite dish? How about pets? Will your tenants pay a separate fee for sewer, water, and garbage service, or will those be included in the rent? What kind of heat does your property have? What does it cost?
The result of not knowing the going rate for comparable properties is that owners simply have to guess and hope for the best. And oddly enough, we’ve found that most property owners charge a lower rent than necessary.
When we take over the management of a rental property, we are generally able to raise the rents enough to more than cover our management fees. In addition, we’ve found that tenants who pay a little more are usually more responsible and keep the property in better condition than tenants who pay less.
If you’d like to explore how Professional Property Management can help increase the cash flow on your rental property, give me a call at (800) 322–2150. We’ll be happy to explain our service, our procedures and our fees.