One question we frequently get asked is about how to set the appropriate rental price for a West Palm Beach rental property. It’s important to be consistent with the process you use to set a price, and there are a few simple factors to consider when you’re pricing your rental home.
First, you need to consider your goals as a property owner, particularly how quickly you want to find high quality tenants for your rental. If the property is sitting vacant and you’re tight on cash, we know you need to fill that vacancy immediately. Under those conditions, you’ll want to be as competitive as possible with your price so you attract the attention of good tenants right away. However, if you have tenants in place for at least the next couple of months and you really want to squeeze as much rent as possible, then you can test out those higher prices and see if you can find the right renter before getting aggressive with pricing.
Next, you need to consider the competition for homes like yours as they will also play a part in your pricing strategy. If there are other homes just like yours in the neighborhood, you need to evaluate their price points. If these properties are similar in size and quality, you’ll need to adjust your own price accordingly. When a home similar to yours is around the corner and has been on the market for a long time, you should go slightly below that rent rate in order to avoid excessive vacancy costs. If there are two properties like yours without the renovated kitchen that your home provides, then you will be able to price it a little higher because of the added value.
Finally, you have to know your market. You can’t get stuck on your “desired” price because the market will ultimately decide how much it is willing to pay for your particular property at that time. Remember that every day that unit is vacant is costing you money. Never push the market too much. When you get stuck on a rental price that is too high, you can risk having a longer and more expensive vacancy period. Looking at that over a 12-month span, filling the vacancy quickly at a lower price can be a better financial outcome for you as a landlord.
If you have any questions or would like us to perform a free rental price analysis on your rental property please contact us at InvestPro Properties.