One of the major mistakes a new landlord in McDonough makes is not learning how to correctly calculate a fair market rental rate for his property. This results in rental property owners losing money every month because of under-or overestimating how much rent they could be asking for. This is especially true as rents continue to rise across the country. Increasing your monthly rent helps you keep pace with the market, and helps you avoid leaving money on the table. When your property is occupied, however, it becomes imperative that you know how to correctly raise rents. While good advice on how to do it is abundant, the most important tool you have to understand and use is the rental property assessment.
Fair Market Rent
The fair market rent of a property is what similar properties that are nearby are renting for. Since the market rent is not the same for every neighborhood, you need specific and local numbers to calculate correctly.
For a McDonough property, you can begin with what other landlords in your area are charging their tenants. Comparable properties, or comps, are similarly sized rental properties that you have to look at with features akin to yours. Some detective work is needed to get this information. Posted rentals and local classified ads are good places to start.
Alternatively, you can contact a McDonough property management company like Real Property Management Anchor who can give you great information about the rental market. Three or more comps are needed so you can calculate the average monthly rent and compare your current rate with the result. You now know your property’s fair market rent.
Regular Rental Property Assessment
Calculating the fair market rent is a necessary first step. However, it is only the beginning of ensuring your rental property’s profitability. For you to maximize your monthly cash flows, you must re-calculate the fair market rent for your McDonough property annually, or even more often, if rents are volatile. In the few years that have passed, a shortage of single-family rental homes has led to a surge in rental rates in almost all markets all over the country. If you have not conducted a recent rental property assessment in your area, it is likely that your rent charges are too low.
Still, it’s not just about money. There are numerous reasons that make property owners hesitant about raising their rent. Some are worried that if they raise their rent, their rental property will become harder to lease. Other landlords believe that setting the rent at the going rate will make it harder to find tenants as their rental house would seem less competitive. Or you might be concerned about getting on the bad side of a current tenant, especially when they have been renting from you for some time. But you have to consider that if you haven’t changed your rent for a few years, chances are your current tenant is paying a rental rate much lower than what others are paying.
Professional Property Management Pays for Itself
Knowing whether you are charging the appropriate amount in rent or not can be both time-consuming and nerve-wracking. Even after having done your own market research, you could still be concerned about losing your tenant if you raise your rent. Having a professional property management company assess your property and set your rental rate can be very helpful. One thing that hinders a landlord from hiring a property manager is the cost. But if you are not charging the right amount of rent, you might already be losing more money than if you were paying someone to manage your property for you. From ensuring you have an accurate rental rate to working amicably with your tenants, a professional property management company can help increase your monthly income, effectively paying for itself.
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