Assigning an accurate rental price when renting out your home can be tough since you don’t want to set a low rental rate that leads to financial losses. That said, assigning too high a rental price can drive potential tenants away. You, therefore, want to hit the optimal price level to ensure your profits are protected without narrowing your prospective tenant pool.
A lot of factors can influence the rental price and you need to be familiar with them to accurately price your properties. With an accurate rental fee, you can attract the right tenant demographics and earn stable earnings for a longer time frame.
Study Comparable Properties to Set the Right Rent
For the best rental price for your San Diego rental, evaluating the competitors around is necessary. Look for similar units with the same amenities and features you offer. Check out these vital factors:
Check out the rental homes in your San Diego neighborhood. Be attuned to the prices in each region since their prices can differ based on the local amenities offered. The demand level can also be higher in certain neighborhoods which will impact their price.
Number of Bedrooms and Bathrooms
When doing a comparative rental study, you should evaluate rentals with the same number of bedrooms and bathrooms. This makes your comparison more reliable since rentals with plenty of rooms can go for a higher rental price.
Single-family Homes vs Multi-family Units
Setting the same rental fee for different property types in San Diego can result in lost earnings. If you have a single-family unit, its rental fee is bound to be higher since you provide a lot of advantages than a multi-family unit would.
New Construction vs Old Construction
When your San Diego rental home is newly built, you can set a higher rental fee since the amenities are new and there’s less need for replacements and repairs in the unit. The tenants also benefit from new home systems and enjoy new appliances as well.
Rental Comparison Sources
As a landlord, you have diverse sources to compare your rental. Here are some of them:
- Online Ads – Tracking prices for San Diego rental homes can be done by viewing popular listing sites. See which property types tend to be taken off the market quickly. Similarly, assess units whose rental prices have been significantly adjusted over time and remained vacant for some weeks.
- In-person – Scheduling property visits can be helpful. You can get a better sense of property details and features. You can also talk with the landlord and see if rental demand for the unit has increased.
- Property Management Company – A lot of property management firms promote a free rental analysis. Given the experience of these professional teams in the real estate industry, they’re very reliable when it comes to setting rent prices for your San Diego property.
Price Adjustment Based on Amenities
If you’re a new property investor, you may have trouble setting the rental fee for your San Diego rental space. In fact, you might make the mistake of assigning a flat rate for all rental units. This can result in financial losses for you since features can differ from one unit to another. Rent setting should, therefore, be based on the following factors:
If you’ve upgraded features in your property, you can assign higher rental rates. For example, tenants could save on utility bills if you provide energy-efficient appliances or gain more space if rooms have been renovated and expanded.
Evaluate the Property Views
With impressive views, you can set high rent prices. You can see this best practice in action when booking a room in a resort. Those with ocean views, for example, often have a higher price per night compared to rooms with less impressive ones.
It’s a given fact that larger units have a higher rental fee since more rooms come with a higher price tag.
If your San Diego rental home offers extra spaces such as a patio or balcony, you can justify charging renters a higher rental fee. Rentals packed with amenities can attract more interest from prospective renters, provided that they are essential features and can increase the quality of life for the residents.
Units located on higher floors are more in high demand. Reasons may include better views and more privacy. Thus, tenants are open to paying more for rental charges. The only exception is if the property is a walk-up.
Proper Rent Pricing can Lead to Better Returns
When calculating your rental earnings, measure whether it’s enough to cover the cost of operating and maintaining the unit, and repairing property damage. You should be able to generate a profitable sum after all necessary deductions have been accounted for.
For those with property mortgages, you may only see major profits after a certain period of time. However, you can still benefit from tax benefits. If you continue to operate at a loss then your rental fee may be inaccurate.
Setting Rental Prices According to Market Demand
Assigning a rental fee for your San Diego rental home isn’t a one-time thing. You would need to review it given the prevailing market demand. You should take time to review and analyze economic conditions so you can maximize rental earnings.
By always being in tune with the economy, you can avoid costly property vacancies. Adjust the rent prices accordingly and prevent financial losses due to overpricing or underpricing of rental rates.
Pricing your San Diego rental properties correctly is essential to ensure the success of your investment. If you would like help setting rent prices or managing your rentals, contact the experts at Keyrenter Property Management San Diego today!