Finding the perfect rental price for your investment property can sometimes be tricky. On one hand, you want to ensure your return on investment is positive and you’re generating an income for yourself. On the other hand, your asking price needs to be in line with the local rental market otherwise your property may be overlooked.
Price your property too low and you could be missing out on valuable return. Price your property too high and you may not find you have much – if any – interest from prospective tenants, who may be looking at similar properties close by with a lower weekly rent. It can be challenging and frustrating sometimes to find the right balance, which is why your property manager can help advise on setting the right rent to ask, which will not only attract tenants but provide you with a long-term strategy for your investment.
During market cycles, ensuring your property remains competitive is vital. This may at times mean keeping rent the same rather than increasing, or even, with proper advice and consultation, reducing slightly. While this may seem counterintuitive, if your property is not competitively priced with similar properties in the area, it may mean the difference between a tenanted property and a vacant property.
If in a downwards market trend, your property manager may advise other ways to keep your property competitive, before the notion of decreasing rent arises. These may include:
- Negotiating on the basis of improvements to the property. For example, introduction of a dishwasher, or fans in a property. Adding ‘luxury’ items to an older property may just be the cherry on top of an otherwise perfect cake for a tenant.
- Introducing yard maintenance as part of the lease. The cost may only be minimal (and deductable) for you, but another sweetener for tenants. It is also a great way to ensure your property’s external is well maintained.
- Longer leases. As many landlords would understand, a good long-term tenant is property investment gold.
Along with providing sound advice based on many years of experience monitoring market cycles, your property manager can provide advice on ways to improve the value for tenants. A good property manager will advise on what is best for your long-term investment and their wealth of experience in the local market will be indicative of your property’s success in the market.