The amount you charge for rent really depends on one thing: the market. Many landlords want to charge an arbitrary amount that matches their monthly expenses or the amount of cash flow they expect to earn. However, you cannot control what the market demands. There are, however, a few things you can control that impact the rental value of your home.
Property Location and Pricing
Location is incredibly important when it comes to real estate investing, and this is true with rentals as well as sales. Most tenants will want a home that’s in a good school district, and close to work. If your home is in a popular and desirable Birmingham neighborhood, you’ll be able to charge more. If it’s in a more remote area, you’ll have to lower your rent a little bit to get a tenant placed. Pay attention to what properties are renting for in your specific neighborhood. Things can change dramatically just one or two streets over. You want to price your property according to the competition around it.
Property Condition, Size, and Amenities
Condition plays a huge part in what you can charge in rent. Tenants will be willing to pay a little more for a home that’s well-maintained, attractive, and has good curb appeal. They will not pay to live in a house that’s dirty, falling apart, or clearly neglected. The size also matters. If you have a one bedroom studio, you’ll probably earn less than a three-bedroom, two-bathroom home. Consider your amenities as well. You can charge a bit more if you have updated appliances and new floors. If your property is in a development with a pool or free lawn care, you can also ask a bit more.
Conducting a Comparative Analysis
When you’re ready to price your home, consider your location, size, condition, and amenities. Then, compare what you’re offering to those homes similar to yours in the same area. You want to know what they’re listed for, but the more valuable information lays in what they actually rent for. Talk to a Birmingham property manager or a real estate agent who can access this information for you. Professionals know the market very well, and are usually willing to provide a complimentary rental analysis for your home.
We would be happy to provide a consultation. Contact us at Decas Group with any questions about your property’s rental value or professional management in Birmingham.
