Key Takeaways
- Pricing Your Rental Correctly Maximizes ROI and Reduces Vacancies - Setting the right rent for your Tacoma home is essential for maintaining steady cash flow and maximizing return on investment.
- Market Research and Expert Assistance Can Help Set the Right Price - Determining the ideal rental price requires analyzing comparable properties, calculating rent per square foot, and considering location, amenities, and market conditions. Hiring a property management company can also provide expert guidance in setting competitive rental rates.
As a landlord, how you price your Tacoma home can make all the difference in how successful you become. The rental price should neither be too high nor too low for optimum return on investment.
If you set it too high, you may struggle with low occupancy rates, resulting in a suboptimal return on investment. However, if you set the rental price too low, then you may not be able to realize an optimal ROI from the investment. You may even struggle to pay for the property expenses.
So, how exactly will you be able to determine the right pricing for your Tacoma home to rent? The following guide by Red Roof Rentals explores several tips to help landlords set accurate and competitive rent prices.
How to Price Your Rental Property Correctly
Here are some tips for pricing your rental properties:
Use the Value of Your Tacoma Property
This is a great starting point to get a ballpark figure of what the monthly rent price can be. Determine what 1.1% of the property’s value is and use that figure as a baseline for the rent price.
That said, remember there may be several other factors you may need to consider including the property’s location, design features, and nearby amenities. Next, consider the competitiveness of the rental market you’re in. Is the price you’ve determined within the average range in the area, or is it going to be high or low? Adjust it accordingly.
See what Comparable Units are Charging
Looking at comparable property prices is another way to determine the rental rate of your Tacoma rental property. The comparable properties should be similar in square footage, amenities, location, and number of bedrooms and bathrooms.
You can utilize online resources to do this, but make sure to apply the appropriate filters like location, amenities, property type, and property size. Another source of current market rates and property features is property management websites.
You can also research comparable property prices by exploring offline options. You can interview local landlords and property managers to get valuable insights into rental trends and prevailing rental prices.
Calculate the Rental Price per Square Footage
You could also calculate the rental price based on a property’s square footage. Unlike with comparable units, this formula can help you determine the rental price regardless of the property’s size.
To calculate how much one square foot rents for, simply divide the rental price by the property’s size. Next multiply the square feet of your property by $1.25. Of course, you could also make some adjustments based on how desirable your property is.
Consider Other Factors that Impact Rental Price
The following are some factors that will usually have an impact on how much rental price a landlord can charge:
- Location – This is inarguably the most significant factor that will impact rental price. In fact, location is usually a top factor that tenants will always consider before renting a property.
- Amenities – What kind of amenities will you be offering tenants? These can make all the difference in how desirable tenants find your rental property to be. Examples of popular amenities for renters include parking space, in-site laundry, granite countertops, pet-friendly policies, and outdoor space.
- Rental Market – The prevailing rental market conditions will also play a crucial role in the pricing of your property. When the rental demand goes up, you can increase the price. But when the demand goes down, you may have to adjust it downwards to keep the unit competitive.
- Certain Features – Prospective tenants consider many factors before renting out a property. Beyond looking at the square footage and number of bedrooms and bathrooms, tenants will also pay attention to the types of appliances used within the unit. Other things they will consider include the amount of storage, air conditioning, wi-fi connectivity, and security features.
Hire a Property Management Company
To be a successful landlord, you’ll need to surround yourself with the right industry experts. Among these is an experienced property manager. A professional property manager can help you determine the right rental price for optimum ROI. They will use their years of expertise in the field to ensure your unit rents for the best price.
Other than helping you with setting the correct price, you could also rely on their help when it comes to any or all of the following:
- Responding to property maintenance issues.
- Collecting rent when it falls due.
- Tracking finances.
- Marketing the property when it becomes vacant.
- Screening prospective tenants.
Bottom Line
Running a successful rental investment begins with how much rent you charge tenants. With these proven tips, you can make more confident decisions regarding your Tacoma rental properties' pricing. If you’d still like help, or want to take a hands-off approach to property management, turn to professionals
Our team at Red Roof Rentals can help you manage your properties seamlessly. With years of experience in the Tacoma rental market, our property managers will work hard to help you maximize your returns. Contact us today to learn about our professional management services!
