If you are considering renting your home, one of the first questions you might ask is:
“How much rent should I charge for my Indianapolis Rental Property?”
Pricing is very important. You want to ensure that you don’t price it too high, or the home will sit on the market; and you certainly don’t want to price it too low and leave money on the table.
First, no matter what method you use to determine your property’s rent rate, make sure you compare apples to apples. In the real estate industry, this is simply referred to as a Comparative Market Analysis, or a CMA.
There are a few factors to consider when determining the optimal rent price:
1. Location: Yes, real estate is about location, location, location.
Same holds true for rental properties.
Try to compare your properties to others very close to yours. You don’t want to go way outside your area when looking for comparable rents.
2. Bedroom/Bath Counts: This is important as well. In rental properties, it’s more important than even square footage. Tenants will pay more for 3 bedrooms than 2 bedrooms and more for 4 bedrooms than 3 bedrooms.
3. Amenities: You’ll also want to take into account the amenities that you either offer or don’t offer. Examples of this could be a garage size, type of appliances offered, or the finish level of the homes.
If you aren’t a Realtor, you may have a tough time finding homes to compare to yours.
If you don’t want to consult a Realtor or a Property Management Company to help price your home, here are a couple of ideas about how to find comparable homes without the benefit of the MLS System:
1. Pound the pavement: Start with people in neighborhood or surrounding neighborhoods. If you know people who have rented their home, or currently have a home fore rent, find out what they are asking. If your home is located in a large neighborhood, there’s a good chance you can call on other “For Rent” signs and get a general idea of rents in your area just by walking or driving around.
2. Hit the web: Do a web search of your area. Websites like Zillow, Craigslist, Realtor.com, Hotpads – just to name a few – are a great way to see what’s currently going on in your market.
As a final note, it’s always better to use data from homes that have actually leased as opposed to home that are currently marketed. For example, a home may be marketed for $1,200 per month, but actually end up renting for only $1,100 per month.
Data from rented homes should be used if available.
If you have any questions about pricing your rental home, being a landlord, or Property Management in general, please don’t hesitate to contact us!