Very Important! It is just like selling a product! Your product here is the right to use your rental property.
The difference between success and failure in the real estate rental business often hinges on charging the right price for a property.
We found many rental property owners often place their rental rates for their rental properties too high or too low.
What happens when you listed your rental rate too high for your rental property?
It will be much more difficult to rent out so you not only have a higher chance to admit bad quality tenants into your precious property but also higher vacancy rate. It is not so bad to have higher vacancy rate if you can offset with higher rental rate, although that often is still difficult to achieve, since all perspective tenants will pay more attentions to new listings than 30-day old listings. You also have much higher risk to admit bad quality tenants because they are the only ones left to apply. As a rental property owner or investor, you can loss thousands dollar quickly when you admit bad quality tenants. So, please be even carefuller on your tenant screening with credit & criminal check and rental & employment check.
What happens when you listed and kept your rental rate too low for your rental property?
You will have less money to keep up with the property maintenance and make necessary improvements. We always suggest the rental property owner to put 1 to 2 month of rent per year aside for property maintenance and necessary improvements so your investment will increase in value over the time instead of deteriorating.
Case Study #1: It is usual that property owners have not raised their rent for a decade and kept the same long term tenants, who never cause any trouble on their maintenance requests and even fix things up themselves. They believe, by not raising rent every year, they would save money to keep the long term tenants happy to stay inside the rental property for a very long time.
What is Wrong?!
We will answer with a question: “What happens to your rental property a decade after your long term tenant decided to move out?!”.
You often found your long term tenants had left you with a very deteriorated rental home and a lot of money needed to put the property back to “rent ready” again. You might left with no choice but sell the home as it is if you don’t have any reserve to bring the house back to rental market again.
Case Study #2: It is usual that property owners thinking they could save money and time by giving their deteriorated property to the perspective tenants who would do improvement themselves or simply don’t mind to live inside deteriorated property with much lower than market rental rate.
What is Wrong?!
Disregarding the liability risk you take by allowing tenant doing major improvements themselves, you also take the risk to end up with bad quality tenant improvements, that is not up to code, superficial, too personal or bad taste. A property that is poorly presented may be poorly cared for by the tenant and attract only bad tenants. A tenant who isn’t getting the attention they deserve might begin to question their commitment to your property and become more careless with it. Plus injury or loss as a result of a safety hazard might result in costly legal claims. At end, we found some investors in this down spiral vicious circle, who have to file bankruptcy and give away their hard-earned investments.
How much rental income can your property achieve?
Not sure how much rent you should be charging or want to know what rental income you could get for your property?
How to get a free rent appraisal or rental assessment from our licensed real estate appraisers and real estate broker?
Real Property Management Choice can market your property at correct rent range to achieve best return on investment. We will develop a step-by-step plan with you based on your available capital and cash flow to make necessary repair and improvements over the time to get more rent $ and increase the overall property value.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.