Many landlords assume how much rent to charge your tenant 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.
If your property is in a well-maintained state and you’re not in financial difficulties, always 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.
I’ve always found tenants willing to pay a higher rental price, than recommended by my letting agents.
Rental property listing websites and speaking with a letting agent are a good starting point for identifying the rental price for your property.
But remember, letting agents will often tell you that the rental potential of your investment property is the same, or below, the average market price.
That’s because real estate agencies only earn a small percentage from letting your property. Thus, there will not spend extra time in helping you secure the highest rental income.
Be a flexible property investor when deciding how much rent to charge your tenant
The key to earning a higher rental income is to be flexible and to not feel desperate when your property is vacant.
To date, I’ve increased the rental income for all my investment properties by $20 to $110 a week, after undertaking 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 on how much rent to charge your tenant is to advertise the property at a higher rental rate. If the property remains vacant, I reduce the advertised rental rate every seven to 10 days based on the offers I have received.
No two properties are the same
No matter what people say, no two properties are ever the same, even if, on the surface, they look identical. 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 features 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; etc.
Furnished properties can attract higher rent. But, as a landlord, you bear more responsibilities if your property is furnished because tenants 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.
So, what are your tips on how much rent to charge your tenant?
Sign up for weekly property investment tips.