With the recent influx of corporately owned single-family residential housing units flooding the rental market it is more important than ever to price your rental property appropriately. A good property manager can assist you in this task based on experience and knowledge within the local market.
As a property manager, I have access to several important tools (aside from personal knowledge of the market) that help me price the property effectively. I have access to powerful Rent Range reports that allow me to can quickly pull and diagnose data on nearby rental units. I also have access to the rental portion of the local MLS that has many rental units from which I can pull rental comps. Additionally, I have comps within our own database of inventory that I can graze through to find similar properties that we currently manage to determine time on market and rental demand and rate.
I speak with many prospective property owner clients inquiring about property management services that explain that they need the rent less the property management fee to cover their mortgage payment, taxes, and HOA. While in theory that seems like a smart pricing strategy in real world application it does not always work. You see, your total monthly costs to own and maintain your property have absolute zero bearing on the rental market or marketability of a particular property. Supply and demand, seasonality, upgrades, and amenities are what drives the asking rent price and time on market of a particular property. At Bottom Line Property Management, we strive to rent all homes quickly and to us that means 2 weeks or less. We are consistently able to achieve that goal and most of our inventory is off the market in less than 10 days from initial marketing to having a signed lease. Things move quickly and we work as efficiently as possible to get the homes leased.
We will reach out to update all of our owner clients that have a property actively in marketing once each week to discuss showings, feedback, and other activity that will be imperative to getting their property rented as quickly as possible.
Occasionally, we will have a particular home that sits in leasing for more than 21 days and that is when it is tremendously important to have a professional property manager behind you! At that point we will visit to re-assess the property, the feedback from showings thus far, updated comps, and related inventory to try to determine why the property has not yet rented. It is sometimes necessary to offer a special on that property to get it rented. Some examples of common leasing specials we utilize will be free or reduced application fees, half month off rent, the rest of the month complimentary, or a reduced security deposit, just to name a few (different tactics work better in different markets). We will work with the property owner to determine their motivation and based on the feedback and activity/interest in the property we can structure a special that simultaneously works for the owner but also makes the property more attractive for potential residents.
It is important to trust the rental comps and your property manager and not try to be greedy by asking too much in rent for the property. The market dictates the rent! Remember, if your home rents for $1,500 per month the lost opportunity cost of that home sitting vacant each day is roughly $50. I know for me personally I would much rather be spending that $50 on a nice steak dinner and a glass of wine rather than having it disappear into thin air by not having my rental property occupied. Just something to think about. Cheers!