Included as one of the biggest mistakes that very new or do-it-yourself landlords in Logan frequently make is not understanding how to calculate a fair market rental rate for their property appropriately and correctly. For that reason, countless rental property owners are under-or overestimating how much rent they could be asking for and losing money every month. This is definitely true as rents continue to rise across the country. If you are not increasing your monthly rent to correspond with the market, you leave money on the table. Obviously, grasping well how to correctly raise rents, especially when you have an occupied property, is imperative. Even if there are lots of great tips on how to do it, the first and most vital tool you should have to know and use properly is the rental property assessment.
Fair Market Rent
The fair market rent of a property is the rate at which similar properties are renting for in your area. The market rent differs hugely from place to place and, yes, even from one neighborhood to the next, so there are no shortcuts: you need specific and local numbers to calculate correctly.
For a Logan property, the most necessary piece of information you must have in your arsenal to start is what other landlords in your neighborhood are charging their tenants. You likewise ought to look at comparable properties, or comps, to make certain that the other rental properties are similar in size and features to yours. To get these particulars, you’ll need to do a bit of detective work. Check out posted rentals in your community and those advertised in local classifieds.
Or, get in contact with a Logan property management company particularly Real Property Management Cache Valley, who will have a wealth of information as regards the rental market. With at least three or more comps in hand, calculate the average monthly rent and compare your current rate with the mark. You now have the fair market rent for your property!
Regular Rental Property Assessment
Even though calculating the fair market rent is a vital move, it is only the first step in keeping your rental property profitable. To maximize your monthly cash flows, it’s relevant to re-calculate the fair market rent for your Logan property at least once a year, certainly even more often, if rents are changing very fast. In the past years, a shortage of single-family rental homes has led to rapid increases in rental rates in various markets across the country. If you have not, for some time, carried out a rental property assessment in your location, chances are high your rent is too low, and you are missing out on income every month.
Having said that, it’s not only about the money. There are multiple other reasons why property owners keep back from raising their rent. Quite possibly you are concerned that raising your rent will make your rental property harder to lease. Various landlords are concerned that if the rent is set at the going rate, their rental house won’t be competitive, and they’ll have trouble finding tenants. Or quite possibly you are wary about angering a current tenant, primarily if they have been renting from you for a while. Naturally, if your rents haven’t changed for quite a few years, there’s a really good chance that your current tenant is paying a rental rate that is well below what everyone else is paying.
Professional Property Management Pays for Itself
It can be time-consuming and, let’s face it, quite a bit nerve-wracking, to know whether or not you are charging the correct amount in rent. Even after accomplishing your own market research, you may still have trepidations concerning raising your rent without losing your tenant. For all of these reasons, having a professional property management company assess your property and set your rental rate may be the possible recourse you’ve been looking for. Landlords frequently hold back before hiring a property manager because of the cost. However, if you are not charging the right amount of rent, you are already losing far more money than you’d pay someone to manage your property for you. By making certain that you have an accurate rental rate and working conscientiously with your tenants, a professional property management company can easily help you increase your monthly income and, in time, pay for itself.
Would you like to know more about what a professional property management company has to offer? Contact us online today or give us a call at 435-753-5200.
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