THE RENTAL RATE
Your basic rental rate will already be determined if you have previously rented your property. However, there are several ways to insure that you are getting the maximum rent for the area market. Many factors can affect the ultimate rental rate. The condition of the property is extremely important along with features such as refrigerators and dishwashers, garages, fenced yards, patios and pools. The size or square footage of the rental unit along with the number of bedrooms and baths will have a direct impact on the rental price. Be sure to compare your rental to one with like features and don’t use a property that has not rented as a comp. The true rental rate is the rate that an occupied property leased for.
Availability, supply and demand, plays a huge roll in selecting the ultimate rate for a rental property. There are a number of ways to determine the availability of rentals in a market area at any given time. The best source would be the number of rental listings on the internet rental listing sites. The MLS rental listings in the area and the listings in the local newspaper or magazines will also show the numbers and types of rentals currently available. It is important to understand the demand. Tracking inquiries or the activity of the rental market will indicate the demand. Late spring and the summer months are traditionally the busiest turnover time for long term rentals here on the Emerald Coast. Since most leases expire at the end of the month, and tenants are required to give a 30 day notice when moving, more listings usually will show up at the beginning of any given month than towards the end due to property being rented and withdrawn as the month goes along. Set your rent in line with those like properties on the market.
In a strong market, one in which there is a lot of activity, it doesn’t hurt to initially add $25-$50 to your rent. You can always back off if the competition increases of if calls slow down, lower the rent. Remember, you can only get what someone is willing to pay. Don’t be greedy. If your property sits empty while you hold out for an extra $25, the lost rent from a vacancy is hard to recoup.
The activity or inquiries you receive will be directly related to the amount of exposure you give your rental. Most prospective tenants now look for rental property on the internet. There are numerous rental sites available to list a property. Posting pictures and details is essential to attract clients to your rental listing. Professional Property Managers have access to many of these sites and have a good understanding of the local market.
The long-term rental market here is closely tied to the military activity. Traditionally, most families like to move while school is out during the summer. Our local Air Bases are home to many training schools and move personnel year round in and out of classes making the market always busy.
Raising the rent on a good tenant when they choose to renew their lease is not always the best way to maximize the profit/loss of your rental property. A good tenant that always pays on time and takes care of your rental is very valuable when you consider the cost changing tenants. Unless the market shows a sharp increase in the rental rates, an increase could cause the tenant to move and make it hard to recover the increased rent.