For new landlords or landlords who are looking for new tenants, how much rent you charge can make the difference between an extremely profitable letting or a property losing money by remaining vacant.
When looking at how much rent you should charge, there are certain crucial considerations to take into account to avoid under or overpricing your property. Some of our top tips for deciding how much to let your property for include:
By this, we mean how likely is it that people will want to rent your property over other available properties, despite its price?
It could be situated somewhere with a fantastic view, or with fully modern and updated furnishings and appliances. The size of a property and its location will also be factors to take into account when considering how much someone would like to live in it. For example, if it’s a first-floor apartment, it will be less valuable than apartments higher up. And if you’re looking for a family to rent a property, but the third bedroom wouldn’t fit much more than a single bed, the chances are this will impact on the property’s desirability.
Demand may seem obvious, but knowing how many people are looking for properties to rent at a certain time of year is really important.
Generally speaking, demand for rental properties goes up in summer, as it’s a convenient time for people to move. There’s no disruption to children who go to school and there’s less chance of slipping on ice when carrying boxes to and from the car.
Another important factor around demand is whether something has been improved in the local area. For example, is there a new entertainment complex with gym, cinema and shops? Anything that makes people’s lives easier, more convenient and more fun can add value to the properties in the local area because these types of things drive up demand.
The age-old way to decide how much to charge for rent is to check out how much other landlords are charging. However, you shouldn’t leave it there. Look into what your potential tenants will find important: does the comparative property have off-road parking or a larger kitchen? Is it close to shops and a pub, or located in a more peaceful, out of the way location?
By analysing what makes your property better or worse in comparison to other local available properties, you’ll be able to obtain a much more realistic rental price, which will prevent your property remaining vacant whilst other properties are let.
Finally, one of the most important things to do is to keep an eye on how many days you have left until the property becomes vacant. If your current tenants do not wish to renew their lease, or they have given you notice, you don’t want to fall into the trap of chipping away at the figure you’re looking to achieve, the nearer it gets to your property being empty.
The best way to avoid this is to research all of the above: desirability, demand and competition; then price your property accordingly. If there isn’t much demand and perhaps your tenants are moving out in the middle of winter, you may have to drop your price accordingly. Similarly, if demand is high, it’s advisable to price your property fairly and wait for a tenant who will appreciate aspects such as its condition and location, as these are the people most likely to take care of it whilst living there.
At the end of the day, the lettings process should allow you to find good tenants who pay their rent on time and look after the property as though it is their own. Finding these types of tenants can take time, especially if you have over or under priced your property.
This is where the lettings specialists at Andrew Granger & Co can help. We are experts in market conditions and know a great deal about how high or low demand is at any location in the Leicestershire region.
To speak to a lettings expert about pricing your rental property today, contact us using the telephone numbers below: