How Dallas Property Owners Can Determine Fair Rental Rates For Their Rental Properties

One of the most important things you should do when you first get into real estate investment is to price your rental home correctly. The average rent in the U.S. is about $1,470. But it's unlikely that that number will make perfect sense for your property.

If you price your rental price too high, you may end up dealing with higher vacancy rates. That’s because most renters may find it unaffordable. On the other hand, if you price it too low, you will leave a lot of money on the table. And you may find it difficult to generate a positive cash flow.

Setting the right rent price keeps your properties occupied and maximizes your profits. Check out these tips property management Dallas has to offer.

Factors to Consider When Pricing Your Rental Property

Several factors affect the rental price of a property. These include:

• The number of bedrooms and bathrooms: the more you have, the higher your rental price can be
• Amenities within the property: these include a washer and dryer, parking, and swimming pool, etc.
• Proximity to external amenities: these include good schools, shopping centers, transportation networks, etc.
• Market conditions: in bad economic times there is a higher demand for affordable rental units
• The condition of the home: a recently remodeled home that has updated features is more attractive to renters
• Rental property size: a home with high square footage in a big lot will cost more for the renter
• The cost of living in your area: some locations are more expensive to live in than others

Once you've learned the factors you'll need to consider when setting your rent, these tips from property management Dallas can help you figure out the ideal number you should be getting from your tenants.

1. Use HUD’s Data to Guide Your Estimations

The HUD’s Office of Policy Development and Research (PD&R) usually provides fair market rent estimates each year. They are meant to guide property owners that want to participate in the housing assistance payment programs.

You don’t have to stick to the estimates HUD provides. But by searching for relevant information based on your location, you can begin to get an idea of how much you can price your property for.

2. Base Your Calculations on the Unit’s Historical Rental Property Prices

Historical rental prices, in this case, refer to the rental income your property has attracted in the past.

If you bought that property from a real estate investor, you can simply ask that person about what he or she has charged renters over the years. Then you can factor in the rate at which the rental prices have increased over the years, and then use that percentage to calculate the new price for your property.

Alternatively, you can check out the rental records for your rental property if you got them after purchase. Then use that information to determine the new prices.

3. Farm Your Neighborhood

Your neighborhood can help you determine the fair rental rates for your investment property if you are willing to do a bit of investigation.

Drive or walk around and look out for the sale signs of properties similar to yours. Then check whether the rental price is listed on the signs. If not, you can call the real estate agent’s numbers and ask.

4. Check the MLS Sites

Take advantage of the information provided on your local MLS database if you have access to it. And if you don’t have access to the MLS database, you can ask a real estate agent or broker that you know to help you out (your property management Dallas experts can help as well!).

Once you put in information about your location, you can view multiple listings of properties similar to yours. Then compare the rental prices across multiple properties. After that, you can decide on how to price your real estate investment.

5. Check Out Rental Listings on Craigslist

The beauty of Craigslist is that it is free to access and has no viewing restrictions. Each area listed in Craigslist has a section labeled “Housing.”

Several sub-sections are included within this section. They include:

• Apts/housing
• Office/commercial
• Rooms/shared
• Parking/storage
• Sublets/temporary
• Vacation rentals

List the investment properties that are like to yours in your area then find corresponding information concerning the rental prices. They may be all over the place, but you can use them to determine the average and median rental price in your area.

6. Contact Local Property Management Companies

What if you don’t have the time to research your local fair rental prices online or offline? That is where your local property management Dallas comes in.

Property managers usually handle many properties in any given period. Setting prices on behalf of their owners is part of what they do.

Determining a fair rental rate is easier for them than you. All they have to do is look into their database and analyze similar properties in your locale. Then they will give you a range of estimates based on the condition of your home and location. If you're looking for help managing your rental properties, including setting the right rental price for each unit, contact us today!

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