How do you set the right rental price for your property?
It can be tempting to set the price for your rental property at your mortgage – or even half – to determine a ‘fair’ price. But this method doesn’t take into consideration what your property has to offer. So how do you set the right rental price for your property?
How much rent is suitable for my property?
Although going off your mortgage payments might seem an easier option, you cannot rely on what you’re paying. You may have a low or high-interest mortgage that skews your monthly payment. Did you purchase your property for a steal because it needed a lot of work? There are several factors at play.
Consider other rental prices in the market.
When real estate agents determine how to set a price for a home, they look at other properties in the area. To begin working towards selecting the right price for your rental property, you should do the same. A good source for this is any site where you can find rental information, such as Rent.com.au’s RentReports tool. A RentReport gives you comprehensive, real-time suburb and rental market data for your property. The report includes both houses and apartments. You can look at properties comparable to yours and in the same area to narrow it down.
A RentReport gives landlords and property investors access to information for professional use, arming you with vital insights. It’s a must-have report for any landlord, property investor or professional.
Your RentReport shows data on:
- Rental pricing trends;
- Days on the market;
- Surrounding suburbs;
- Leased rentals;
- A suburb overview, and much more.
Once you have a good list of comparisons, consider what you’d expect to pay for a similar space. You should arrive at a price that you’re happy with and one that will attract the right sort of long-term tenants, so you profit. The higher the rent, the increased chance of a higher turnover rate.
Know when to list your property
The time of the year can affect how much you get for your property and how long it will likely stay vacant. Do your research and consider the market trends and saturation in your suburb to help you list at the right time. A RentReport from Rent.com.au can give you some insight into the trends throughout the year in Australia.
Consider your rental property’s selling points.
Have you thought about the value-add features in your property? The features and amenities you can offer a prospective tenant can influence the price they are willing to pay in rent. List the key features of your property that add value to your home so you can be very clear when writing your listing. Can you offer any of these features, for example?
- A dishwasher
- Recent renovations
- Hardwood floors
- A central location close to public transportation, shops and restaurants
- Plenty of closet space
- Included utilities
- Additional storage (i.e. a basement or garage)
- Off-street parking
Evaluate your property’s aesthetics
Depending on your lease, your tenants generally can’t pain their rooms. Think about your choice of colour palette, and consider going for neutral colours where possible. Hardwood floors are usually desired more than carpet because they are easier to clean and look aesthetically appealing.
If you choose to rent your property furnished, use stainless steel appliances in the kitchen where you can, and modern fixtures in the bathroom. These small things are likely to attract more tenants and will command the best price for your investment.
Safety and security
This point doesn’t need too much explaining. It’s best practice to make sure your tenants feel secure, rather than fearing they will be robbed – or worse. Everyone wants to live in a safe neighbourhood. Cautious renters will check the crime statistics in the area, so you should too. You may consider adding additional security features such as a security alarm or ample outside lighting to make your next tenant feel safer.
Remember to re-evaluate your price at every lease expiration to keep up with current market trends.
Visit www.rent.com.au/landlords for information on all Landlord products and services, or click here to get started and list your property on Rent.com.au.
We look forward to securing you a great tenant!