Among the biggest mistakes that new or do-it-yourself landlords in Ammon oftentimes make is not understanding how to calculate a fair market rental rate for their property the right way. Thus, an awful lot of rental property owners are under-or overestimating how much rent they could be asking for and losing money each month, accordingly. This is exactly accurate as rents continue to rise across the country. If you are not increasing your monthly rent according to the market, you leave money on the table. It goes without saying, perceiving how to correctly raise rents, primarily when you have an occupied property, is particularly necessary. Considering that there are lots of useful guidance on how to do it, the first and most significant tool you have to know about and apply is the rental property assessment.
Fair Market Rent
The fair market rent of a property is the rate at which similar properties are renting for in your area. The market rent may differ largely from place to place and, furthermore, from one neighborhood to the next, so there are no shortcuts: you need specific and local numbers to calculate correctly.
For an Ammon property, the most essential piece of information you must have to start is what other landlords in your locale are charging their tenants. You similarly need to look at comparable properties, or comps, to always see to it that the other rental properties are equal in size and features to yours. To get these details, you’ll need to do some detective work. Check out posted rentals in your place and those advertised in the local classifieds.
Or, communicate and work with an Ammon property management company, as an example, Real Property Management Southeast Idaho, who will have a wealth of information with the rental market. With at least three or more comps in hand, calculate the average monthly rent and compare your current rate with the outcome. You now have the fair market rent for your property!
Regular Rental Property Assessment
Although calculating the fair market rent is an important first thing to do, it is only the initial step in keeping your rental property profitable. To maximize your monthly cash flows, it’s imperative to re-calculate the fair market rent for your Ammon property at least once a year, possibly even more often, if rents are changing very often and fast. In the last few years, a shortage of single-family rental homes has led to rapid increases in rental rates in numerous markets across the country. If you have not recently conducted a rental property assessment in your area, odds are your rent is too low, and you are missing out on income every month.
Then again, it’s not only about the money. There are a lot of other reasons why property owners waver when it comes to raising their rent. In all likelihood, you are apprehensive that raising your rent will make your rental property harder to lease. Numerous landlords feel anxious that if the rent is set at the going rate, their rental house won’t be competitive, and they’ll have trouble finding tenants. Or in all likelihood, you are bothered about angering a current tenant, especially if they have been renting from you for a while. By all means, if your rents haven’t changed for a few years now, odds are that your current tenant is paying a rental rate that is well below what everyone else is paying.
Professional Property Management Pays for Itself
It can be time-consuming and, let’s face it, kind of nerve-wracking, to think whether or not you are charging the correct amount in rent. Even after performing your own market research, you may still have anxiety regarding raising your rent because of the possibility of losing your tenant. For all of these reasons, having a professional property management company assess your property and set your rental rate may be the best course of action for you. Landlords are reluctant to hire a property manager because of the cost. But definitely, if you are not charging the right amount of rent, you are already losing far more money than you’d pay someone to manage your property for you. By making sure you have an accurate rental rate and working closely with your tenants, a professional property management company can support you to increase your monthly income and, in the end, pay for itself.
Would you like to know more about what a professional property management company has to offer? Contact us online today or give us a call at 208-522-2400.
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