How much rent should you charge?
Determining how much rent to charge is a balancing act. Naturally, you want to receive a good return, but not put the figure so high that the property sits vacant for an extended period of time.
We lift back the veil to explain how we come up with a figure. We believe this process provides the best outcome for our clients.
Much like in business, competitor analysis has a strong influence on the price point of a rental. When we get a new listing, we spend time looking at a range of things, including the rent of similar sized properties in the area, the condition of the property and whether we can charge more based on some of the features of house.
We also might suggest a few things that will allow us to increase the rent. We look at this in greater detail in our blog, How to make your property more appealing.
Having a local understanding of the area is very important in pricing a property. This is a reason why it might be better to leave management up to a professional, as they will have intimate knowledge of different suburbs.
While similar properties within the same suburb should be a comparable amount, factors like proximity to schools, shops or a noisy train line or highway might influence the price.
As we start to come out the other side of COVID-19, we are seeing an unusually high amount of people looking for properties. This is great for property owners, not only because they a lot of tenants to choose from, but they also potentially justify a rent increase due to high demand.
However, it’s important to not have a knee-jerk reaction to a sudden flurry of enquiries and applications. A decision to up the rent should be based on whether this will be ongoing.
Have you considered pets?
Even though “no pets” clauses are popular in Australian rentals, you can miss out on an opportunity to increase rent if you exclude people with furry friends. Tenants with pets are more willing to spend a little bit more to ensure their pets can come with them.
Some people might be concerned that the pet may cause damage to the property. This concern can be somewhat negated by the increased revenue and from a quality landlord insurance policy.