Every landlord hopes and wishes that all their rental properties are taken up by potential tenants, because we all know an empty rental property is worth nothing. Whether the rent is high or low, the fact is that the rent acts as an income for every landlord; and who doesn’t love a good monthly income? Ps, if you are a landlord who is thinking about putting their property on the market, consider getting in touch with Watford letting agents to find the best tenants for your rental property!
With that being said, the best and only way for a landlord to ensure that every property he or she owns is taken up by a tenant is by setting the right rent. If the rent is too high, a potential tenant might get scared away and if the rent is too low, tenants might feel that there is something wrong with the property. Plus, why would a landlord want to lose out on his or her income by setting the rent too low? At the end of the day, setting the right rental price is the only way to earn profits while finding the best potential tenants. So, here are some tips to set the perfect rent for your rental property.
Check out the local prices:
The best way to figure out the right rent for your property is by researching the rental rates of similar properties in the area. Say, you have a relatively new two-bedroom flat in the town centre, so as a landlord you need to start looking at the rental prices of similar two-bedroom properties in the area. This will give you a fair idea of how much rent you can charge. Now, if your property has any additional features such as a great view or a rooftop terrace, then you can charge a slightly higher rent.
Understand the demand:
If the demand for rental properties in the area is high, then rental prices can be competitive. So, if a similar property down the street is being rented for £1,500 per month, you can easily list your property for £1,550 or £1,600 as you have to keep the demand and supply in mind. This only works if the local demand is high and rental prices are competitive. On the other hand, if the supply for rental properties is low but then demand is high, then you can easily list the same property for £1,800 per month, or maybe even higher. Essentially, finding the right rental price is a game of supply and demand!
Covering your costs:
As a landlord, you want to make sure that you are making a profit from your rental property. This means your rent needs to be high enough to cover your monthly costs while making a profit. To figure out your monthly costs, you need to figure out how much money you are spending everything month on things like landlord’s insurance, property insurance, mortgage repayments, maintenance and so on. Once you have a figure in find, you need to compare the rental prices of similar properties in the area and come up with a rental figure that covers your costs while giving you some kind of profit.
Know your property:
If you have an exceptional property that is like no other property in the area, then you are free to charge whatever you like. But, with that being said, it is important to keep the local rental prices in mind. However, if your property has some additional features such as a rooftop terrace or an indoor fireplace, great views or energy-efficient appliances, an open plan layout or spacious balconies, then you are within your right to charge a higher price than the average rental price. Again, the difference between your rental price and the average rental price must be justified by the features of your property.
There are also quite a few tools online that can help you find the right rent. These tools require details such as location, size, features, number of bathrooms, number of bedrooms, postal codes and quite a few other data points. Based on the figure you get from your online rental valuation, you can plus or minus a few hundred pounds based on the average local rental prices, special property features as well as the local demand to set the perfect rent for your property.
