Before investing in Roseville investment property, it’s important to understand how to properly calculate rental value. Determining the right amount to charge tenants isn’t easy and landlords don’t have the luxury of charging however much they want. There’s a lot to consider and it’s wise to do some research before deciding on a value.
Don’t estimate when it comes to charging rent. In order for an investment to be profitable, landlords have to price their unit accordingly. If rent is set too high, a unit will likely remain on the market. On the flip side, if rent is set too low, the owner can end up in a difficult financial position.
So, how do you calculate the unit’s fair market rent?
Here are some general steps property owners can use to help determine the rent for their unit without scaring away potential renters.
Rents typically vary depending on the location of a property and it’s important to keep that in mind when investing in a rental home. Fortunately for homeowners in Roseville, there’s not a huge difference across the board for one side of town versus the other.
Although tenants will always pay more for a unit located in close proximity to parks, shopping, schools and restaurants; there are only slight changes between East, West and Central Roseville. For instance, West Roseville has newer subdivisions which will sometimes draw a little bit more than homes in older Central Roseville. However, it really all comes down to what a tenant is looking for in number of bedrooms, baths and square footage.
Another factor to take into account when figuring rental prices is what amenities a unit has to offer. For instance, amenities such as pools, club houses, garages, washer/dryer, fireplaces, etc. all factor into the price. Other aspects that can affect price of a rental unit include HOAs, age of the home and if utilities are included or not.
Once you have an idea of the location, size and amenities on the property, you need to look around for similar units for rent in your neighborhood. In today’s market you don’t want to be exorbitantly higher than what your competitor is marketing their home for. So, look at comparable properties that are with a two to three block radius from your unit.
Knowing the average rent of properties within your area will be beneficial for you when calculating rental value. Just remember to compare your home to ones that have the number of bedrooms, bathrooms and square footage as yours. In addition, be sure the comparable is kept in the same condition as your unit.
If you’re competitive and right in line with other homes in your particular neighborhood, you should have a considerably low vacancy rate. The essentials like location, amenities and size will all help when you make your final decision for rent value.