Pricing your rental property appropriately is a key factor in determining whether your property rents right away or takes months to fill.
But where do you start?
There are basically four steps;
- Check comparables
Browse through online platforms such as Rentboard and Rentfaster, to look at comparable properties in your area and surrounding areas.
For example – if you have a 3-bedroom, 3.5 bathroom unfurnished house for rent in the SW area of your city – check out other 3 bedroom 3.5 bathroom houses in the SW to see how your property compares – is it in better shape? Older, newer etc.? Be honest with yourself and set your price realistically.
Rentfaster’s Pricing Tool
Rentfaster has a helpful feature through their “pricing tool” which provide a report indicating current listings and prices in addition to average days on the market.
- Post your ad
- Monitor the results
The next two steps are to post your ad and see what happens. Here’s a diagram to help you interpret results;
If you have lots of views but no one calls/emails to book a showing, you’ll need to drop the price. Start with $50. Increments. Once you’ve hit the sweet spot- your phone will start ringing.
What happens if you have low views? This usually means the picture is not very appealing or the price is too high – both are easy fixes…change the main picture or drop the price.
What if you have lots of people making appointments to view the property but no one submits an application? Ask the potential tenants what would need to happen to make them submit an application. People usually tell you the truth. If you’re hearing the same comments about a dated/tired looking kitchen, consider painting the kitchen or updating the appliances /countertops. If people say they were put off by the neglected front yard – hire a landscaper to tidy up the yard.
Here’s a simple diagram that explains the monitoring process