Landlords managing rental property should evaluate the rental rates on their rental units and research market rent rates regularly to ensure they are maximizing rental property income. Taking time to do the necessary homework and determine fair market rents will help landlords minimize vacancies by avoiding overcharging, and also ensuring that landlords do not leave any rental profits on the table by charging too little for monthly rent. Below, we share a few tips for pricing your North Carolina rental property correctly to attract high-quality tenants and reduce the amount of time your rental units are vacant.
What is Market Rent for Rental Properties
If you plan to check market rent for changes to determine if it is time to lower or raise rent when marketing your North Carolina rental properties, then you need to first understand the definition of market rent. In the simplest of terms, market rent is the going rate for rental properties in the local rental real estate market. So, how do you determine fair market rent? Let’s look at a few steps you can take to do just that.
Review Market Conditions of Your Rental Market
Do your local rental market conditions dictate higher rents due to lower vacancy rates? Are available rental units plentiful giving tenants more choices and an upper hand when negotiating rent? Understanding the answer to these questions is important for landlords who wish to ensure they are charging fair market rent. Limited vacancies may mean that landlords can be more aggressive with rent rates, but you must first research comparable properties in your area.
Pricing Your Rental Property – Comparable Rental Properties
The next step to determine fair market rent for maximizing your rental property income is to examine comparable rental properties (similar size with similar features and amenities) in your local rental market. Remember, don’t just choose other similar rental units in the same city as yours. Instead, narrow down the proximity of rental homes to the same neighborhood as rental pricing can fluctuate wildly from neighborhood to neighborhood.
How and where can landlords research comparable rental properties in North Carolina to check market rent rates? A good place to start is to go online and research Craigslist and, if you have access, review the local MLS (multiple listing service) listings for both active and rented properties. Landlords can also pay attention to rental activity in the neighborhood. Call phone numbers or visit websites on “For Rent” signs and ask for the monthly rent amount.
Property Management Companies Give Landlords the Upper Hand
There are many benefits of working with a property management company.
One is access to expertise that goes beyond researching local market conditions and comparable rental properties to come up with fair market rent rates. Property managers use their knowledge and experience to look at variables like neighborhood desirability, amenities, floor plans, proximity to public transportation and major thoroughfares, local economic factors, and much more to ensure you maximize monthly rental income.
If you have any questions about our tips for setting rent rates on your North Carolina rental properties in Raleigh, Durham and Chapel Hill, contact us now, and we’ll gladly help.