Whether you live in a home or condo that you are needing to rent, or you have acquired rental property as an investment, determining the correct rental fee can be a bit tricky. There are a variety of factors to consider when determining the best price point for your property. Not only that, but knowing where to go to gather your information is also essential. So, we'd like to help you sort through all the information by offering some tips on how to determine the best price point for your property as well as point you toward resources that can help you get started.
Investment Properties in Canada is a great resource that offers some good general advice such as how to price your unit based on the value of the property, as well as number of units you plan to rent. In addition to this site, doing a simple internet search with a specific postal code will be very helpful in providing more targeted information for your rental property based on its location. As location, location, location is the rule of thumb when it comes to purchasing real estate, it also applies to determining the best price for renting your property. Checking the "comps" or comparable properties in your area is the first step in determining the price point for your property. Talking with other landlords or realtors can also be helpful in providing a ball-park figure for setting your fee.
A good residential property management company that specializes in your area is another great resource. They know what properties are worth and can help you maximize your rental income.
Other factors that will help in determining fees are:
A property located in a more upscale area will command much higher rent than one located in a middle to lower-income neighborhood. Desirability of the location is a huge factor in determining the rental fee.
Unit Size & Desirability
The size of the unit is another factor. Obviously a larger unit can command more rent than a smaller unit. The desirability of the unit itself; is it a ground level unit or an upper level unit? What type of amenities does the unit offer? Are the appliances new? Is there a washer/dryer in the unit? If it's a stand-alone house, does it have a back yard? How many bathrooms does the home have? Is the home located in a good school district? All of these factors will be part of determining the rental fee.
What can the market bear?
If you live in a major metropolitan area, it is very likely that rental fees will be much higher than if you live in a smaller town. There is high demand for good rental properties in a large city, so the markets in these cities can bear much higher rates than small town markets. However, this is one to watch as things can fluctuate. While generally speaking large markets can bear higher rates, other factors can affect these rates, such as high unemployment or a large influx of new people, both of which will impact rental rates.
So these are the things that you will need to consider when determining the rental fee for your property but how do you know if you are in the right price range or not? Good question! Two telling signs that can help you determine if you need to adjust your fees would be if your place is on the market for several weeks with no tenants and few inquiries, then it is likely you have it priced too high. If you are getting a high volume of calls for your property, there is a chance that you could have the rental fee set a bit too low.
The goal is to be as competitive as possible based on your location and the rates of other rentals in your area while taking into consideration the condition and amenities of your property. You also want to attract good tenants who will take care of your space and pay the rent on time. Once you've done your research and set the rent at a fair market rate, you can be more certain that your place will be the perfect fit for the perfect tenants.