Tips for Setting the Right Rent for Your Property

Tips for Setting the Right Rent for Your Property

Melbourne Property Management agency, Atwell & Co has been reputed for finding the right rentals for owners and filling up vacancies speedily. But what really is meant by right rental? How would you know that the rent that you have set for your property is right? Of course, there are data available from the market that can give you some idea about the rental trends in different localities but it is only an indicator, not to be followed in totality.

Because, there are several other factors that decide the right rent. This has to be viewed from the perspective of both the land lord and the tenant. The land lord would feel that the right rent would be the maximum rent that can be recovered from the property whereas from the tenant’s view point the right rent is linked to the desirability of the property as they have a lot of options available with them.

Here is how you can proceed in setting the right rent for your property.

  • Stay tuned to the competition – This would need some research to be done over a few weeks to ascertain the movement of rentals and understand the preferences of the tenants. The online advertisements and local newspapers give some idea about the ongoing rental trends of similar properties in your area. Track the occupancy rates of the apartments, which are being lapped up quickly and which are the laggards, which apartments have revised their rent downward and which apartments have remained untouched. Discovering that landlords in your area are offering incentives for rentals, get ready to come down on the rent as the demand for rentals is low.
  • Adjust the rent constantly – Setting the right rent would require constant adjustment with the market rates that are driven by the demand for rentals. Poor economic performance can surge the demand for rentals as more and more people cannot afford to own homes. But the thrust could be on cheaper and smaller apartments as people are on the austerity mode. Higher demand commands higher rent and vice versa.
  • Desirability matters – The rent of a unit depends on how desirable it is to the tenants. The right price would depend on this factor. If you have multiple units of that are overall identical, look for the finer differences between the two and set slightly different rentals for the two. This would seem logical to the tenants and the possibility of letting out both the units quickly is very high. There are various factors on which the desirability of the property will depend upon – floor area, floor level, floor plan or layout, view from the apartment and updated appliances and amenities like closet and hardwood floors.
  • Gauge response – What kind of response you get from the tenants would be an indicator about how right the rent you have set. If the response is poor, surely it is time to have a re-look at the rent which may be very high. It could also be too low that is a cause of tenant’s losing interest, suspecting something fishy about it. Higher rent has to be justified by proper amenities and location to generate interest among tenants. Find the optimum point where you get the best response to your satisfaction, proving the correctness of the rent.
  • Earn profits – The sure indicator of right rent is when you can earn profit from the rent after recovering all associated expenses of the property. If you have something to put in your pocket after covering for repairs and maintenance of the property, mortgage payments (if applicable) and the cost incurred while the property remained vacant, then you should be happy to have got the right rent.

The bottom line has to show some earnings for you to become sure that you have got the right rent; else you will have to be satisfied with recovering the basic expenses of the property.

Espana Gomez is an author of this blog. Recently she works as an interior design assistant in her town. She loves daydreaming about beautiful homes and interior decor.