The best rental price for who - you may ask. You want to earn the most and a tenant wants to pay the least, so who determines the price?
The first step is to compare your property with similar properties listed as far as features and location are concerned.
The internet is of course a great source where you can easily find this information - also take note for how long a listing had been up and how many times it had been viewed.
Speak to local estate agents and establish supply and demand and rentals realized for a similar property.
Compare the features of your property with others listed and consider how you could add value and make yours more attractive to tenants.
For example, we furnish the property with good quality and stylish window treatments (curtains, blinds etc.) and we do it for two good reasons:
Consider this too: The offered rental is $1000, but you were hoping to lease your property for $1050, so you turned down the $1000 offer.
If your property is vacant for even one month, your annual income will be $11 550 as opposed to $12 000, had you settled for a bit less. (Not to mention the difference should the vacancy period be even longer).
Annual escalation warrants a special mention when you calculate the best rental price. Important: if you address escalation in the initial agreement, it will not be an issue later.
Annual small increases are acceptable, but why don't you consider escalation twice annually as opposed to once. For example: a 5% escalation twice a year as opposed to a 10% escalation once a year. This will appear a small amount to the prospective tenant but will in fact gross you more rental over a year.
If you do not implement annual escalation, the value of your property will be affected. Let me explain. If you want to sell your property and the income that it generates is not on a par with other similar units on the market, the new owner will be faced with a big rental increase and definite tenant rebellion. So it is important to stay market related with your rentals.
You can also consider a rental pool. You and other property owners in the same apartment block or development can form a rental pool, or it may be a service offered by your Property Management company. Each owner has a percentage share (based on the best rental price of his property).
Prospective tenants can pick and choose amongst the vacancies without the landlords undercutting one another and the total rent collected is paid out according to the shares.
We have a variety of free legal forms to assist you with your rental property, such as:
For links to the above please visit our Real Estate main page.
For more legal information and property tips, please refer to our Landlord page.
Finally - the best rental price is the one that is paid regularly, on the due date and without any hassles - the ideal situation when you become a landlord.