You're going to want to get:
The URL put in there so you can go back and look at the pricing, and you can look at the photos, the descriptions and other details.
Bedroom count. If it's a three bedroom home, search for three bedroom homes. You don't want to go for two bedrooms or four bedrooms.
Next, bathroom count. If there's an extra half bath or maybe it's short one, that's okay, we can factor that in later, but try to get close.
Square footage, and this one's important. Find homes within a range 15% more or less square footage than yours.
And then finally, garage count. If your home has garage or off-street parking, that's going to work in your favor. And then general condition of the home. Does it need work? Is the home outdated? Have you recently remodeled or done some work in the kitchen and bath?
STEp 3: Determine the Price Per Square Foot
Now that you've got that list, you're going to make some calculations to figure out where your home should be priced. You're going to start by calculating the price per square foot of each one of these homes. And you can easily do this by creating an Excel formula and putting a price per square foot calculation in the last column. Now, once you have the price per square foot calculated for every home, tally them up and come up with an overall average. Once you have the overall average, you can now find the lowest and then also the highest. And if you selected good comps, you're going to be able to see where your home should be priced pretty easily. So all you'll have to do then is multiply your square footage times the price per square foot number, and bingo, you have your current market value.
STEP 4: FINE TUNE YOUR RENTAL PRICE
But don't publish the property yet. Now you need to zero in on the most immediate comps and price your home alongside of theirs. And if the market is going down, just price your home a little bit lower. If the market's going up, you probably want to price it the same, maybe slightly higher, but let's be cautious about doing that. And I can save that for another video. So before you settle on the price that you're going to publish, make sure that you're not getting all emotional about the market or your property, otherwise you'll be making a pretty serious pricing mistake that most rental owners are guilty of.
STEP 5: Market Value VS. Marketing Price
Now, the last step is to set the marketing price. There's going to be some psychology involved here, so just bear with me. It's going to be what's called charm pricing, and I like to use it. ” Charm pricing refers to the use of prices ending in the number nine, because of a left digit bias. It's a phenomenon which consumers, their perceptions and evaluations are influenced by the leftmost digit of the product price.” So for instance, if your home's market value came out to be $2,024, your marketing price should be 1,995, for instance. Now, this technique even involves the even-odd pricing that leverages the belief that buyers are more sensitive to certain ending digits in price. So odd pricing would be prices that end in 1, 3, 5, 7, or 9, and even would be whole numbers, like $2,000 or $2,050. Odd pricing tends to be a little bit more popular because it indicates a deal in the customer's mind, making them more likely to buy, or in this case, rent your home.
Tools to FIND RENTAL RATE TRENDS
Your Own Rental Data Might Not Be Sufficient
At the beginning of this article, I mentioned that you need to know where your market is trending in order to be a leader in pricing. The hardest part for most rental owners is that managing rentals is really a part-time job. Generally a very part-time job, unless you have quite a few properties. I mean, most rental owners didn't think about rental rates for the last 12 months when they were trying to get it rented, or maybe it's been a few years since you've had a tenant move out and you're behind on your rental rates. Either way, there's a good chance that you really don't have a good place to start from with regard to your own rental data.
CURRENT LISTING ACTIVITY IS A CUE
Now, it's a different case if you own and manage multiple properties and you have some recent rental history to work with. So here's some tips on where you might find out trends that are happening in your rental market. And the first and foremost is just by obviously listening to the activity that is or is not happening with a property that you most recently published. Not only will a lack of activity be an indicator of whether or not your property is priced well, but it's also going to help you understand if the market has slowed down or maybe even picked up since the last time you rented. Now, you're going to want to keep in mind though other factors. So for instance, your property could be experiencing just one of those factors that affect pricing, not really a trend. So for instance, it could be that you have a vacancy in December and the market isn't doing much. Well, that's because everybody is shopping for Christmas and they're not really shopping for rental properties.
ONLINE RESEARCH FOR RENTAL DATA
Another way to find market trends is to go online and just do some research. There might also be some news outlets online that have recently published something about your market. But beware, sometimes those stories are more opinionated or sensational rather than factual. And hopefully you'll be able to tell the difference. But the best place to get market data for your rental property is with a local property management company.
CONTACT A PROPERTY MANAGER IN YOUR AREA
As a property manager in Boise and the surrounding area, I have up-to-date rental data, historical rental data, and I also use industry software that helps evaluate rental rates for the clients that we work with. So if you would like a no hassle, no commitment analysis on your rental property, check out this cool link. It's a very simple form that you can fill out, enter your property information, and get almost immediate market rental report for the home address that you provide.
Now, this free tool is simple, it's easy to use, and it's going to give you up-to-date pricing data for your home. It'll give you insight into how the market is trending, and you'll even be able to see some of the comparables in your neighborhood. And it's yours for no obligation. And I mean seriously. So finally, I just want to thank you for reading this article. Please like it, subscribe so that I can get you more updates, how-to's, and some real-world advice on how to make the most out of your rental property. So for now, I'm signing off. Have a great day.