Do you maximize monthly rental income on your rental properties by setting the right rent rates? Are the rent amounts you charge for your rental units in line with the local market, thereby reducing the time between vacancies and attracting high-quality tenants? Successful landlords understand the importance of setting the right rent rates. These rental property owners also agree that a professional property management company will help them maximize their monthly rental income by using their local rental market expertise to set the right monthly rent amount when marketing their rental unit.
Rental Market Conditions Dictate Rental Rates
Market conditions for rental properties, both nationally and locally, are the determining factors for setting rent amounts. The good news for landlords is, “The US rental market is on fire.” That’s what Business Insider wrote as they detailed a July 28, 2015 Census Bureau report on rental and homeowner vacancies which showed that “rents are soaring and vacancies in the US have plummeted to their lowest level since the mid-’80s.”
In simple economic terms, more tenants are looking to rent than there are properties available for rent. These conditions also exist here in the Raleigh, Durham and Chapel Hill area of North Carolina. In fact, so far in 2015, the number of rental units built is far exceeding number of units built for home ownership. The large developers are leading the way as the market predictors shift from home ownership to the rental market.
Even as the developers undertake new projects, there remains a high demand for quality single-family residential rental homes as well as residential townhomes. Also, we see a drop in demand for residential condominium rental units at the entry-level end of the market. There is, however, steady demand for premium condominiums such as those at 400 W. Rosemary Street in Chapel Hill.
Local Market Expertise of Property Managers
Setting rental rates relies on more than understanding the supply and demand of both the national and local rental markets. The process also involves more than looking at competing rental units and what they charge for monthly rent. Both of these are a good place to start, but landlords who rely only on these variables will leave a lot of money on the table when it comes to maximizing the value of their rental property by setting the right rent amount.
A property management company uses local market expertise to drill deeper into rental market conditions to ensure you maximize monthly rental income. How do they do this? They 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. These are insights landlords, especially those who live elsewhere are not privy to when preparing to market a property for rent.
Benefits of Setting the Right Rent Rates
At the very least, landlords want to set an amount that will pay your mortgage payment, cover your monthly repair costs, and create a reserve of funds for emergencies. These are the most fundamental reasons why landlords ask a for a certain rent amount. Property management professionals deliver all of these benefits and more when they use their expertise to set your monthly rental rate. Here’s how:
Marketing your rental property with a well-researched rental price will attract more potential tenants and increase the demand for your rental unit. This increased demand leads to more offers to rent which, in turn, helps landlords lease to higher-quality tenants. Higher demand also reduces the amount of time between vacancies which, in the long run, increases cash flow for your rental unit.
One of the biggest mistakes a landlord can make is to market a rental property with an undervalued or overvalued rent rate. Don’t make that same error. Follow the lead of successful landlords and utilize the expertise of a professional property management company to ensure you set your monthly lease amount correctly, right from the start. As the Raleigh, Durham, and Chapel Hill property management experts, we help landlords like you maximize your monthly rental income on your rental units. Contact us today with any questions and to learn how we can help you protect your investment and improve your bottom line.