By Property Management Systems
One of the biggest problems that some owners have is setting the correct rent for their Portland Oregon Rental Property and they will either set it too high or too low and get paid less money.
As an owner, one of the keys to success with owning rental property is setting the correct rent because, this means that you will have more than enough money coming in each month to cover your mortgage, taxes and other expenses.
If you’re just getting started with owning rentals or are searching for a refresher on owning Portland Oregon Rental Property, this article is for you.
Tips For Setting The Correct Rent
Start with a Comparable Analysis
Thanks to the Internet you have a variety of resources you can use to come up with the right rent for your rental property in Portland Oregon.
Just go to Google.com to type in the address of your rental property or use a website like Zillow to do a comparable analysis of homes which may be renting nearby to determine what should be the monthly rent for your Portland Oregon Rental Property.
A word of caution though, before using comparable data on websites like Trulia or Zillow, make sure that you verify the date that the data was posted because, some websites only update their rental listings and data every 30 to 90 days, instead of in real time.
Visit Rentals in the Neighborhood
Another great way to figure out what you should rent your Portland Oregon Rental Property for is to visit other homes and properties for rent which may be nearby.
During a tour of comparable rental properties, you should also be looking for properties which have more or fewer amenities than your property because you should also use this information when factoring the rental rate for your property as well.
Don’t Overprice Your Portland Oregon Rental Property
Although renting their property for the most money possible is the goal of every owner, the reality is that some owners may make the mistake of overpricing their rental properties.
In today’s world it’s not uncommon for renters to check the internet to find out what a rental property should rent for and if they find a property to be overpriced they will look elsewhere.
When a rental property is overpriced, renters will begin to wonder what’s wrong with the property, it’s days on market will increase and since most leasing agents search for properties based on what their clients want to spend it’s possible that your rental will not come up in most search listings.
More Tips for Pricing Your Rental Property
Timing is Critical
In real estate, it’s often said that the three most important things are location, location, location. To be an efficient and profitable landlord, I’d argue that the three most important things are time, time, time and here’s why:
Seasonality (time of year) impacts rent prices
Rent prices are largely dependent on how much demand there is for rental properties in your area.
Across the country, demand for rental properties is highest in the summer months. Demand peaks in the summer months because people dread moving in the middle of winter, especially in northern states where moving in winter entails hauling furniture through snow drifts in sub-zero temperatures. The second reason that demand is higher in the summer is that families don’t want to disrupt their children’s schooling.
Just like demand for rental properties is highest in the summer, rental prices tend to be higher in the summer months. If you are looking for tenants in the summer, you’ll probably be able to get tenants to agree to a higher rent amount than you would in the winter.
By keeping this in mind, you should try to ensure that any new leases you enter into expire in the summer months. If your property currently has a winter expiration, you may want to negotiate a three to a six-month extension with the tenants to get on a summer vacancy cycle. If this doesn’t work, you may want to make your next lease 15 or 18 months long to ensure that your next vacancy falls in a high-demand season next time.
Days to Vacant
One surefire way to lose money on your rental property is to have the property sit vacant. Having a property sit vacant is so painful that you want to always know the Days to Vacant for your property. This metric is actually as simple as it sounds: a count of the number of days until the rental property is vacant.
The lower your Days to Vacant becomes, meaning the closer you are to having a vacant unit, the more desperate you’ll become and you’ll likely be willing to accept a lower rent.
To avoid a vacancy and to maintain strength in negotiating with tenants, be sure to start the lease renewal and tenant search process as early as possible.
You should always contact your existing tenants 90 days before the existing lease expires to begin the renewal conversations. If the existing tenants decide not to renew the lease, you’ll be able to start showing the unit to new prospective tenants 60 days before the existing lease expires (in most situations).
By starting the renewal and tenant search processes early, you’ll give yourself ample time to advertise your property and find great tenants. For tips on how to find stellar tenants, read this.
Starting the tenant search process early will help you avoid stress, but it also allows you to start with a high asking rent price. If you don’t receive as many leads as you need to find a qualified tenant, you can always lower the rent amount. Starting early gives you the time to gradually lower the rent, if necessary.
Get Portland Oregon Property Management
For help with renting your Portland Oregon Rental Property, or to speak with us about our property management services, contact Property Management Systems today by calling us at (503) 515-3170 or click here to connect with us online.