When you’re preparing to rent out your Roseville property, one of the first decisions you have to make is how much to charge in rent. The amount you charge will have a meaningful impact on which tenants you attract and how quickly you’ll be able to rent your property out.
To avoid a long and expensive vacancy and to ensure that only qualified tenants apply for your property, you’ll want to make sure the home is competitively priced.
This doesn’t mean you should underprice it. That would be a mistake, especially considering California’s rent control laws will only allow you to increase the rent to a certain amount every year.
But, overpricing a rental home is dangerous. Good tenants are well-informed and they know what the market demands for homes like yours. They won’t be willing to overpay.
Here are some of the things to consider when you’re committed to pricing your Roseville rental property competitively and accurately.
Rental Value Must Be Measured Against Vacancy Risk
You might have an ideal rental amount in mind, and maybe you’ll attach that rent to your property without doing any research or comparative market analysis.
Don’t be surprised if you don’t get a lot of interest from potential tenants. You may have priced the home too high, and if you did – you’re going to be waiting a long time to get that property occupied.
No rental home will stay occupied 100 percent of the time. Every investor plans for vacancies and turnover periods. But, when you make a pricing mistake that leads to a long vacancy, you’re losing money that you’ll never be able to recover.
Vacancies can be a nightmare for real estate investors. Not only are you losing the cash flow that comes with monthly rental payments, but you’re also spending a lot of time and effort to list the property, market the home, and find new tenants. You’re paying for utilities, maintenance, and other property expenses while the home sits empty without a tenant.
Without a tenant, there’s no cash flow, which means you have nothing with which to pay monthly expenses like the mortgage, insurance, taxes, utilities, and the like. One of the best ways to avoid vacancy risk is to price your rental home within the market range.
Effectively Pricing Your Roseville Rental Property
You will have to base your expectations on how long it will take to rent the property on the price you’re hoping to charge. You’ll also have to remember that the market largely dictates what you can ask, no matter how committed you are to a specific number.
As Roseville property managers, we spend a lot of time monitoring the local market. When we are marketing your Roseville rental property, we’ll report all the leads, showings, and analytics to you so you can see exactly where you stand and what kind of attention your property is attracting as it’s currently priced.
If it looks like we need to be flexible with the price, we’ll have a conversation about that.
When you’re managing and leasing your own property, be prepared to stay flexible with your price, especially if you’re not getting much interest. When people aren’t calling for more information or trying to schedule a showing, you have likely priced the home too high and you need to be more competitive.
Access Good Data To Competitively Price Your Roseville Rental
You can’t properly price a rental home without good data. As we said, if you market your rental property extensively and no one calls to see it, one of the first suspicions you should have is that the price is too high.
Take a look at what similar homes are renting for. Get recent rental amounts and find out how long they were available before a lease was signed. You can look at rental amounts posted on sites like Zillow and Zumper, but the data provided by professional property managers are always more reliable.
Roseville Location Impacts Pricing
Location plays a big role in pricing as well. Make sure your rental value matches where your property is located. Maybe it’s on a busy street, and when prospective tenants drive by the property, they think it looks interesting. But, when they call and ask how much the rent is per month, and they find out it’s on the high end of the Roseville rental market, they may not want to pay top dollar for a rental home in such a busy location.
Tenants are willing to pay more when the home is well-located and close to schools, workplaces, restaurants, and entertainment. They want a local grocery store. More remote homes and homes that are in busy, loud, and congested areas, will require a more competitive price.
Property Condition Drives Price
There’s not much you can do about the Roseville rental market and the competing properties in that market. There’s not much you can do about your property’s location, either.
You can, however, control property conditions, and this is where you really have a chance to increase the value of your rental home.
Renters are obviously going to pay more for homes that are well-maintained and offer upgrades and updates that they can’t find elsewhere in similarly priced homes. Pay attention to the condition of your property. If it’s not in the best shape, you’re going to have to lower your rent quite a bit or invest in some renovations.
Pet-Friendly Properties Bring In Better Prices
Whether or not you allow pets into your property will also affect your price.
Pet-friendly properties typically rent faster and for more money. Good tenants are always willing to pay pet deposits, pet rent, and pet fees in order to move in with their beloved cat or dog.
You have to be creative and you have to be competitive. Even in a market where supply is low and demand is high, tenants are going to look for value. Set a rental price that will keep your vacancy rate low and your tenant pool high.
We can help. Contact us at Action Properties and we’ll help you set a competitive price that also brings in as much income as possible.