Determining rental value for a property involves several factors that can vary based on location, property type and market conditions and is crucial to a successful rental campaign. Here are some key factors to consider:
Market Research
There are numerous ways to compare your property with other rental properties in the market. Check realestate.com.au and look at similar properties in the same suburb with the same specifications that are currently listed for rent.
Property features and overall condition
Consider the condition of the property and any recent upgrades or renovations that might justify a higher rental price. If your rental property is looking a little tired, you may not achieve the higher rental price of similar properties. Also consider if your property is rental ready – you can read some tips here.
Local Rental Trends
Understanding the rental market trends in your area is important, particularly demand, location and whether the rental prices are stable or increasing. Demand for a rental property in a sought-after area will drive rental values higher. Tenants prefer suburbs that have good schooling, easy access to public transport and close to local amenities.
Adjust based on Feedback
Once your property has been listed for rent, take on board feedback provided through potential tenants – this will give you a really good indication on the value of your property and what tenants are prepared to pay. If you have over-valued your property you will have poor inspection attendance, minimal applications and lack of quality tenants.
Getting it Wrong
Regardless of the market conditions, if you have over valued your rental property, the property will sit on the market for an extended period of time. Potential tenants are savvy, have access to information on the internet and most will not pay over market value. As a landlord, be flexible and discuss with your property manager what the feedback is from potential tenants and trust that your property manager is knowledgeable in determining the right price.
By carefully researching and analysing these factors, you can determine a rental value that is competitive yet reflective of the market conditions and the unique attributes of your property or, more importantly be guided by your experienced property manager.
Determining the right rental value requires significant knowledge and understanding of what the market trends are. In determining a rental value, we prepare a Comparative Market Analysis and appraisal of the property for our landlords and discuss the advantages of not over-pricing to ensure your property is rented out as quickly as possible.
Landlords and property managers alike both want properties rented out as quickly as possible with great tenants!
