Pricing Your Louisville Home to Rent
Have you just started renting out your Louisville rental property? Are you having a difficult time trying to fill a vacancy? If so, the problem could lie in how you’re pricing the home.
You see, when renting out a property, the rental price plays a crucial role in how fast your property’s vacancies are filled. The right price will not only ensure you attract the right tenant but will also help you maximize your ROI.
In this article, we’ll provide you with tips on how to price your Louisville home to rent.
Tip #1: Conduct a Comparative Market Survey
When looking for how much rent to charge tenants, one of the first things to do is to look at the competition. There are a number of things that you should consider when conducting the comparative market survey.
One such thing is the neighborhood. Examine properties that are in the same neighborhood are your unit. That’s because rental prices tend to differ considerably across different neighborhoods and cities.
The other things to consider are the number of bathrooms and bedrooms, and property type. Your survey should only factor in those homes that are the same size and offer similar amenities.
Tip #2: Know Where to Look for Similar Properties
If you are just starting out, you may not even know where to look for comparable properties. Here’s where to find them:
Online: A quick Google search for “Properties for Rent in Louisville” can yield numerous results. You can use sites like Trulia, Zillow, and Hotpads for that purpose. Keep track of the properties that are getting rented fast versus those that remain unoccupied for weeks.
In-person: You can also look for similar Louisville properties in person. Once you find a comparable unit, interview the landlord. In particular, find out how much they are renting the unit out for and whether they are having difficulty renting it out.
Through property management company: Having several property managers come by to get their opinion of just how much rent you should charge is very beneficial. Due to their experience and knowledge of the local market, they will most likely know how your rental stacks up against the competition.
Tip #3: Adjust the Rental Price According to the Amenities You’re Providing
There isn’t a standard price for all one-bedroom or two-bedroom units. Unless they are exactly the same, the price will vary depending on various things, including the available amenities.
When it comes to amenities, the following are some factors that can impact the rental price:
- The square footage: A unit that has more square footage will certainly cost more than that with less footage.
- Property improvements: If your property has updated appliances, new flooring, or other notable improvements, it’ll rent for more relative to a property with dated features.
- A view: Does your property have a garden view or a view of the parking lot? The former will obviously have a higher asking rental price than the latter.
- Floor level: Tenants usually find higher floors to be more desirable, with a walk-up being the exception.
- Proximity to entrainment hubs: If your property is located near restaurants, cafés, movie theatres, or great parks this could also impact the price of your rental.
Other features that make a property more desirable include an open floor plan, stainless steel appliances, an in-unit washer, and ample storage space.
Tip #4: Calculate Your Profit
As already mentioned, the right price is one that guarantees maximum ROI. But at the very minimum, the right rent is one that covers all property expenses. It should be able to cover expenses such as repairs and maintenance, vacancy costs, and mortgage repayments (if any).
A good ROI is generally one that is above 10%. But that being said, different investors take different levels of risks. That is why, before investing, it’s important to know your budget vis-à-vis the potential return.
Tip #5: Examine the Rental Inquiries
After a successful rental marketing campaign, prospects will naturally reach out to inquire about the rental. And it goes without saying that the more inquiries the higher the chances of renting out the property.
However, if you’re getting little to no inquiries, then the rental’s pricing could be the culprit. To be sure, make note of questions prospects may be asking when they inquire about the property. If the topic of rent keeps popping up it’s possible that you may have overpriced your property and that may be the reason prospects are shying away.
So, make the necessary adjustments and then re-list your property. If that doesn’t work either, the problem could lie elsewhere at which post it could be beneficial to have a professional look at your rental ad.
Tip #6: Adjust the Rental Price When Necessary
When demand for rentals goes up, the price follows suit and vice versa. The following are factors determining rental demand:
- The local economy: When the local economy is bad, the rental demand can shift based on people's ability to pay rent.
- The season: Demand for rental housing tends to go higher in the summer, as families try to move before the school year begins.
- The property’s location: Its proximity to amenities such as schools, highways, public transport routes, and entertainment hubs can impact rent.
As you can see, pricing your Louisville rental home requires a multi-step approach. So, if you’re just starting out as a landlord, your best bet would be to hire a professional manager to help you do it right.
Alltrade Property Management can help you determine the best price for your property so you can make the most of your investment. What’s more, we can help you in other property management aspects, as well. Get in touch with us to learn more!