The first question a lot of owners ask is: what will my home rent for? They really want to know the market price of their home. It is important to remember there is a market price on homes, and it’s determined by your market, just like there is a market for any kind of product you buy.
The biggest contributing factor to that rental price is location. Where your home is located is a huge determining factor on what your market rent will be. The next factor is the size of your home. This includes the number of bedrooms, bathrooms, the size of the family room and general layout. The third contributing factor to the rental price is the condition and cleanliness of the home. The location and size are the most important factors; when someone is beginning their search for a home, they will start with that. Then, when they begin touring homes, the condition and cleanliness will come into play.
Inevitably, people will rent a home that costs less than your market. There is always a range of prices, and if you price your rental home on the lower end of the market, your home will rent faster. Homes in similar locations and of similar size with a lower price will always rent faster. If you price yourself above market, that will lead to vacancies.
We always tell our owners to think about vacancy when you are considering how to price your rental property. If the rent you list that property at is too high, you might have an extra two weeks of vacancy. That’s half a month’s rent that you will lose, which could have been avoided if you had listed the home at the lower end of the price range. Over the course of a year, that lost rent will add up and put you at a financial disadvantage.
When you are deciding how to price your home, think about the potential of lost rent in your calculations. Consider the location your home is in, the size of the property and the impact cleanliness and condition will have on the people who come to see the place. When you put all of these things in perspective and understand the market for rental homes in your area, you will arrive at a price range. If you want to rent quickly, price your home towards the lower end of that range.
If you have any questions, or need help pricing your Grand Rapids rental home, please contact us at Access Property Management Group.
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