The cost of a vacant rental property is high, and that’s why it’s so important to price your Golden rental home competitively for the market. You want to attract the best tenants because good tenants increase your rental value and your ROI. Those well-qualified renters have a lot of options, and helping them decide to pick your property over all the others requires smart marketing and accurate pricing.
While you want to be competitive, you don’t want to be priced too low. That will only leave you earning less than you should be, and it may be hard to catch up to market value without dramatic rental increases later.
Here’s what you can do to land on the right rental value.
Access Data that Reflects Market Rents
A thorough comparative market analysis is an important first step when you’re pricing your own rental property. Take a close look at the Golden, Colorado area and the rents that are being charged for properties like yours. No matter how great your home is, it’s not going to rent for a lot more than the average rental range in the market. The best way to avoid mistakes in the pricing process is to have a clear understanding of what the rental market will bear.
You can use some of the online rental sites such as Zillow or Zumper to research what homes in your area are listed for. Most of this data is pulled from the MLS or from general listings. Just make sure you’re comparing properties that are similar to yours. And, make sure the rental rates are current. If you’re looking at a property that was listed three months ago and is still vacant, the price might have something to do with it.
If you’re struggling to make any sense of what you find, a Golden property management company can provide some professional insight and help you access reliable data.
Consider Your Location and Property Condition
The market isn’t the only thing that’s going to impact your rental price. Location plays a key role as well. Good tenants want good neighborhoods. If you’re close to shopping, restaurants, entertainment, and commuter routes, you’ll be able to charge more than you would for a property that’s more remote or stuck in a heavily commercial or industrial area. Think about what tenants will be looking for. Families with children will want good school districts, and if you happen to be in one, you’ll be able to charge more.
Improving the appeal of your rental home will also help you set a competitive and profitable rental price. Tenants are willing to pay more for well-maintained, attractive homes. If you are renting out a property that’s well-landscaped, freshly painted, and easy to imagine moving into, you’ll be able to price that home a bit higher than one that’s old, deteriorating, and holding on to the smell of all the residents who have ever lived there.
Pet Friendly Properties Earn More
Something that a lot of owners don’t necessarily think about when they’re pricing their rental homes is the value that’s found in offering a pet-friendly property.
Allowing pets into your property can seem like a risk – they tend to be messy and sometimes there’s extra damage, especially with large dogs. However, the damage a pet can potentially cause rarely exceeds the deposit.
Renting to tenants with pets can be more profitable. You’ll have a much larger tenant pool and a lower risk of vacancy. More than half of the potential tenants in Colorado have at least one pet.
Try Some Pricing Psychology
Here’s a funny little tip:
Be mindful of the numbers at the end of your price. For example, instead of pricing your rental home at $2,000 a month, consider advertising a $1,995 price. It’s only five dollars, but studies have shown that it makes people think they’re getting a deal. This might also attract a larger pool of tenants to your listing. Renters looking at price points under $2,000, for example, will find your home for rent, but they wouldn’t find it if you had attached the $2,000 rental price.
These are three quick tips on how to price your property competitively on today’s market. If you’d like some help with Golden property management or you have any additional questions for us, contact us at Laurel Property Services, Inc.