What’s The Right Rent Price For My Rental Property?

HOW BEST TO DETERMINE THE LIKELY MARKET VALUE OF YOUR RENTAL UNITS

It’s simply beating a dead horse to talk anymore about how out of whack the real estate sales markets are and have been since the changes in supply, demand, and interest rates that followed the pandemic. When will sales prices come down? Who knows? How much will the interest rates come down this year? Not much. What else can we speculate about that won’t be all that helpful in the present? Plenty…but let’s not.

Importantly, while the sales market is ice cold, the rental market is red hot. As Nexus has pointed out in the past, there’s never been a more qualified rental candidate pool and the prices landlords are getting for rentals continue to rise. While all real estate is local, the rental market is especially local. If you’re trying to maximize your rental property returns, and you’ve already added value during the rent-ready turnover process, you’re ready to get the most rent the market will bear. And what’s the best way to pinpoint what that price point is? Work with a local professional.

LEARN MORE: 4 EASY STEPS TO FOLLOW TO GET YOUR APARTMENT RENT READY

THREE REASONS YOU SHOULD CONTACT A PROFESSIONAL

1. TIME IS OF THE ESSENCE:

When it comes to home sales, sure you want to move your home as soon as you can, but that urgency is multiplied substantially when it comes to rentals. When you sell you’re getting that lump sum eventually but in rentals each week and month that goes by is zero income that you can’t get back. If your mortgage payment is $2000/mo. and you’re hoping to get $2500/mo. but it takes you two weeks to realize you’re above market and the actual price is closer to $2200, you just cost yourself $1100 right off the top.

A real estate professional with experience in the local market is going to help you start at the right price. They’ll typically recommend that you start just above the likely price point given the current market and will monitor from there and compare to other properties in the area.

2. ADVICE AND GUIDANCE FOR WHEN AND HOW MUCH TO MOVE YOUR PRICE:

All investors are relying on feedback to inform the best next move and real estate professionals have the experience needed to interpret that feedback. What are candidates saying (and not saying)? What generalizations can we make based on candidate response times and urgency for showings? How does this feedback compare to the interest that other properties are currently getting?

Your real estate professional will indicate what your opening price should be with a planned schedule of changes in mind…a schedule based on feedback, not just the calendar.

3. THE VALUE OF HAVING A PARTNER IN YOUR CORNER

With so much of the world online and in our pockets these days, it’s easy to be swayed or give too much value to what you think other people are doing, or getting when it comes to real estate prices. A real estate professional is a much needed anchor that will keep your focus and approach where it needs to be. They’ll keep you grounded in your original goals and insulate you from jumping out at a tenant candidate that doesn’t put a check in enough boxes.

And most importantly, they’ll provide confidence in the decisions you make. No one wants to begin any endeavor with major question marks and renting out a property is no different. Leasing is the beginning of the tenant/landlord relationship and it’s the wrong place to cut corners or make decisions without full conviction.

WHICH REAL ESTATE PROFESSIONALS WILL BE THE MOST KNOWLEDGEABLE?

Contacting any realtor will be beneficial to a property owner, but working with a local property manager will yield the most benefits. Here’s the big difference:

PRIORITIES AND INCENTIVES

You can absolutely count on a realtor to find you a qualified tenant that will pay the highest rent price. That’s what they do and most do it well. But rentals are not as rewarding in terms of compensation. There are not many realtors who prefer rentals to sales so there is less specialty toward that market. And once that tenant is found, approved, and placed, the realtor will wash their hands of it and move on.

A property manager needs to find you a qualified tenant that will create the least amount of headaches down the road because those headaches will be theirs to deal with. They’re not thinking about the commission up front, but about the shared long term investment in your property. By working with a property management company, you’re contracting out that burden and responsibility.

What if you just want help with the leasing and don’t want full property management? The property manager is still the better option because they specifically work with rental properties and most will offer leasing fees without holding you to any other commitments. Their leasing teams will be experts in the local rental market because that’s what they focus on. They’ll also have a more informed intuition when it comes to tenant candidates because they’re always working with tenants at the properties they manage.

LEARN MORE: YOU ARE NOT GIVING UP CONTROL WITH A PROPERTY MANAGER, YOU’RE GAINING A TEAMMATE

CONCLUSION AND NEXT STEPS:

There’s a best way to invest in rental properties and finding the right tenant at the right price on the right timeline is essential to getting off on the right foot. Connecting with a local property manager who knows the ins and outs of the rental property game is the best first step you can take. At Nexus Property Management®, our offices offer full property analysis so you’ll know what amount of rent you can expect and how much you might have to put into it to attract that top of the market client.

If you’re interested in learning more about Nexus’ services and you're in one of our many territories, contact any of our teams across Arizona, Connecticut, Massachusetts, and Rhode Island.

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Mick Lefort is the General Manager of Nexus' New Haven County Franchise Office and the Vice President of Operations for Nexus Property Management®, a National Property Management Franchise that manages all types of rental property from single family homes or condos to large apartment buildings and complexes.

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