It is fall in 2016, and we love this time of year in Indianapolis. We’re talking about an important question for investors and rental property owners, which is: how much should you charge for rent? The rental amount plays a big part in maximizing your returns.
Indianapolis Property Management Education: Vacancy and Pricing
If you charge too high a rent, you might wait longer to get a tenant. So, there might be a vacancy rate that’s higher than you want it to be. If you charge too little, you’ll probably get a tenant right away, but it will be more difficult to maximize your return. You are trying to find that sweet spot where it’s just enough that the price isn’t too low or too high.
Indianapolis Property Management Education: Pricing Tools
At ES Property Management, we use several different tools to correctly price our properties. RentMatch.com helps us look at what has rented recently, or what is currently leased. We can look by zip code to find the neighborhood, the school system, and the current rental amounts. We also find out what is available currently. Right now, we are trying to rent out a vacant property and we noticed there are 18 other properties in same neighborhood currently for rent. That makes it more challenging, and you want to watch your rental amount in those areas, because there is so much competition. Time of year also factors into pricing. In Indianapolis, the market gets quiet once kids go back to school. People are more likely to move in the spring or the summer than in the winter.
Indianapolis Property Management Education: Pricing and ConditionIf the property has great curb appeal, gets people in the door, and then shows them a nice home inside that smells and feels good, you’ll be able to charge a higher rental amount. You also have to consider the amenities as compared to other rental properties. There might be a fenced yard, or utilities included by the HOA if the property is a condo or a townhouse.
There are many different factors that need to be considered when you’re deciding what to charge for rent. As brokers, we also check the MLS or BLC to see what other properties have rented for and what’s on the market in that neighborhood. Having different sets of eyes to analyze the property and the data will help you choose the best price.