DenCO Property Management & Sales (DenCO) believes charging the correct rental rate is the first step in attracting good tenants, which increases the likelihood of getting paid on time and improving retention. The following factors help determine what to charge for rent:
Know Your Competition
Websites like Zillow and Trulia are handy tools for real estate brokerage, but not rentals because their information tends to be too general. It is better to hire a local property management company to find the best rates to maximize rental income. Property managers calculate the specifics of each property, such as bedroom layout, a fenced yard, or an attached garage, in determining the best rental rate.
Timing Matters
Rental rate seasonality happens because of the inconvenience of moving at a particular time of year. Typically the demand for rentals is highest during the spring and summer and tends to flatten during the winter. In August, interest is low because families are getting ready for the school year. Managers trying to fill vacancies during these times might have to lower their rate because of demand softness.
DenCO also believes that the day of the month a rental property is listed is critical in leasing success. Rental units placed on the market at the first of the month give DenCO the time to tweak the rate till rented. We recommend listing between the 5th to 25th of each month. If listed in the last week, the property usually sits empty.
Playing to the Market
Property management companies, typically less emotionally tied to their real estate, are better listeners of what the market is saying about rental rate pricing. It is best to drop the rental rate slightly to sign tenants rather than leave the unit empty. On the other hand, it is always better to have no rent instead of signing bad tenants. DenCO leans on its tenant screen process to find the best leaseholders for rental.
Other Factors
Looking at what each property offers is crucial. For example, a comparable property that is similar in size but includes a garage or fenced backyard should justify a higher rental rate. Other factors to consider are:
Parking: The availability of street parking or a garage is attractive to many renters and warrants higher rents.
Security: Property in low-crime neighborhoods gives renters peace of mind about their safety and warrants higher rents.
Location: A desirable location increases a property’s attractiveness to renters and justifies higher rents.
Zillow and Trulia do not consider these factors when calculating rent rates.
Final Thoughts
Deciding how much to charge for rent is just one part of being a successful property manager. DenCO uses screening to investigate prospective renters before signing a rental agreement. By submitting a rental application, the future tenant warrants that the information provided is true and correct. They authorize the property management company to investigate their credit, employment, rental and criminal history based on their social security number. A good placement helps maintain owners’ rental income and protect their real estate investment.
Owners who want to offload the rental pricing process should consider hiring DenCO to manage their properties and tenants. Please call 303-722-9688 or fill out this form on the contact page.
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