Are you struggling to set the rental rate for your Summerville property?
Many rental property investors find themselves in this situation because they understand the importance of setting the right rent. Go too high and the property will struggle to attract or retain tenants. Go too low and you won't maximize your rental income.
Stuck between the two worlds, you're left wondering how to arrive at the right rental rate. Well, rental valuation isn't guesswork. There's a lot of research and expertise that goes into determining a rental rate.
Read on for a list of important factors to consider.
Consider Property Type and Size
The type and size of your rental property are the primary factors influencing its rental pricing.
Typically, for the same type of property in the same location, prices will increase with an increasing number of bedrooms. A one-bedroom apartment in Legend Oaks, for example, will cost less than a two-bedroom apartment in the same building.
Is your property an apartment, duplex, condominium, or single-family house? Different types of rental properties offer varying living conditions, a fact that will always affect their rental pricing.
A single-family home, for example, offers a more exclusive living environment than an apartment in a multi-dwelling complex. As such, other variables like the number of bedrooms held constant, the single-family property will cost more to own or rent.
Other property characteristics, like the age/condition of the building and whether it's in a controlled development community (HOA) will also affect rental valuation.
Neighborhood
Location has a big impact on the value of real estate property, and consequently the rental valuation. In Summerville, there are several neighborhoods, some leafier than others. In an upscale neighborhood like Orchard Hill, for example, rents are much higher than for comparable properties in more affordable neighborhoods.
Rental prices in affluent neighborhoods also tend to rise at a faster rate, and they don't typically decline as fast when certain economic conditions, such as inflation, come into play.
However, keep in mind affluence isn't permanent. Deteriorating security and aging infrastructure are some of the conditions that can cause a neighborhood to lose its affluence, and rental prices will likely see a sharp decline.
Renter Demographics
Customer is king in any business. Rental businesses are no exception.
If your target customers cannot afford your product (rental unit), you'll have no choice but to bring down the prices to their financial level. The alternative is an unoccupied unit.
The renter demographic in the Summerville neighborhood where your rental property is located will also determine its rental price. For instance, younger populations like Gen Z cannot afford as much rent as millennials and Gen X because they're either students or just entering the workforce.
Get Rental Valuation Expertise
A lot goes into determining rental pricing for a property. As a DIY landlord, you may not have the experience to do all this correctly. That's where rental valuation experts come in.
OakTrust Properties is a family-owned property management company based in Summerville, SC. Our experienced rental analysis experts provide the data that helps landlords like you make informed decisions.
Contact us to learn more about our services.
