In recent years, rising rents have been a big part of Virginia's housing crisis. As a landlord, this should be your starting point for any rental valuation.
See, determining how much to charge for rent is a game of small margins. Market trends, like the one in Virginia, can make all the difference. At the same time, this is far from the only deciding factor you'll need to consider.
Want to know how much you should charge for rent? If so, here are four things you should look at before coming up with the right number.
Market Comps
The first thing you should do when setting your monthly rent is to research the competition. After all, that's what your potential tenants will do.
The simplest way to research your rental market is to head to Zillow. They allow you to input all sorts of criteria, from parking to pet restrictions. For an in-depth look at the market, though, you should invest in rental analysis.
A good rental market analysis (RMA) involves comparing at least five similar properties. It should include evaluations of the neighborhood, calculations of rent per square foot, amenities, and so on.
Amenities
Speaking of amenities, they play a key role in getting people interested in your rental. The more convenience you offer, the more you can charge for it.
For instance, many tenants are ready to pay more for a rental with appliances included. These days, reliable amenities can cost thousands of dollars. Plus, fitting them into a rental can be inconvenient.
Amenities come in two main types: on-site and in-unit. The on-site ones, like a pool or fitness center, benefit everyone in the building. The in-unit ones, such as the washer and dryer, are only accessible within the rentals.
Seasonality
Renting is a seasonal business. Most people move during the warmer months, with 70% of moves taking place between Memorial Day and Labor Day.
Why is this the case? Well, students and parents prefer moving in the summer in order not to disrupt schooling. Summer months also don't have a lot of holidays, so coordinating moves is easier.
Despite the demand for rentals being higher in the summer, winter listings can still work. That said, you may need to lower your rent to get tenants in the door. This is true even for rentals with a high property value.
Financial Needs
As a property owner, it's important to consider the internal needs of your rental. These include seasonal, ongoing, and unexpected expenses.
For example, unless you've bought your rental in cash, you'll owe your lender a monthly mortgage payment. To lower property risk and get tax advantages, you may want to start a real estate holding company.
Another cost associated with owning property is the need for maintenance. Some costs will be ongoing, but you also need to account for unexpected repairs. Consider outsourcing these tasks to a maintenance company.
Book a Rental Valuation Today!
When it comes to setting rent, it's your goal as a landlord to find the balance between profit and affordability. The above guide will help you get started!
Still not sure how much rent you should charge for your Richmond property? Our property management experts at PMI Richmond will help you find out! Schedule a rental valuation with us today!
