Whether you’re new at property management or a seasoned veteran, you want to ensure that you’re charging the tenants the right price. If you’re overcharging and your tenant finds out, they may demand a lower price or even move out! If you’re undercharging for rent, you’re not getting the most out of your property. Over time, this can result in significant losses.
The first aspect to take into account is the location of the property. Make sure you search in the neighbourhood and surrounding suburbs to find properties located near you.
Obviously, the next step is to find properties of a similar size and structure. Generally, the bigger the property, the more you can charge. Once again, perform some research on similar properties in the area. This research will give you an idea of what is fair to ask of your tenants.
The condition of the property also needs to be taken into account. If the property is in bad condition, you need to lower the price significantly. Of course, it may just be better to make the repairs before ever renting the property to attract a quality tenant and possibly getting a higher rent!
The last thing to consider is the tenant. Many property managers and even seasoned investors forget to consider the tenant. If you have an amazing tenant – i.e. pays rent on time, keep the property immaculately and even completes some very minor maintenance for you free of charge, it is definitely a good idea to keep the rent a little bit below the market average. Not only is it a reward and an incentive for the tenant to stay, but it may save you thousands in turnover and vacancy costs!
There are many considerations that need to be taken into account when deciding how much to charge tenants, but the best thing you can do is to ask for an obligation free market appraisal from your Perth Property Management Expert, simply by calling Investors Edge on 9472 1606 or visit www.investorsedge.com.au
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