Many landlords assume the monthly rent charged for their investment property should be on par with the rental prices of neighbouring properties in the same location.
Such landlords are limiting their rental income potential. Don’t be one of them.
On the assumption that your property is in a well-maintained state and you are not in a difficult financial situation, you should always aim to set your rent a little higher than the market rate.
There is always someone out there who will want to rent your property at your set price, eventually.
In fact, I have almost always managed to find tenants willing to pay a higher rental price, than recommended by the local letting agents.
Rental property listing websites are a good starting reference for identifying the price range of your local rental market, and so is speaking with a local letting agent.
But remember, real estate agents and letting agents will often tell you that the rental potential of your investment property is the same, or below, the market price.
That’s because real estate agencies only earn a small percentage from letting your property. Thus, they are less willing to spend more time in helping you secure the highest rental income.
Be a flexible property investor
The key to earning a higher rental income is to be flexible and to not feel desperate when your property is empty.
To date, I have managed to increase for rental income for each one of my investment properties by $20 to $110 a week, after some low-budget renovation work. Note that you should not expect to increase your rental income if you do not invest in maintaining the property.
My technique has always been to advertise my properties at a higher rental rate. If the property remains vacant, then I reduce the advertised rental rate every seven to 10 days.
How much you should increase your rent by is a matter of advertising your property, and seeing how many prospective tenants are responding.
No two properties are ever the same
No matter what people say, no two properties are ever the same, even if, on the surface, the look identical.
That’s because the quality of the features inside the property deteriorate at varying rates depending on the tenant’s level of usage. Use this fact to your advantage.
Be critically alert of things people are willing to pay more for, such as: a good window view; a bathtub: an intercom system: gym and pool facilities; built-in wardrobes; good natural lighting in all the rooms; parking; balcony; to name a few.
Furnished properties can also attract higher rent. However, as a landlord, you will bare more responsibilities if your property is furnished as the tenant will expect you to repair or replace damaged items.
Additionally, worn furniture makes a property look outdated no matter how clean it is. Read my post on whether or not you should furnish your investment property.
Do you have any tips on how to increase your rent successfully?
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Please note, though I own a few properties, I am not a legal, financial or professional property expert. I’ve written this post to share my personal experiences and would love to hear your opinions and views.