Pricing is an important part of renting out a property, and it can give landlords in Hamilton headaches. How do you know what you should price your property? What impacts rental values? How can you optimize your rental rate without chasing away good, stable tenants? When is it appropriate to raise the rent?
We’re measuring rent optimization against rent stability today, and helping you decide what type of pricing strategy works best for your Hamilton investment property.
Pricing Your Rental Property
The right price for your rental property depends on the market, the competition, and the tenant pool. Some landlords will price their property on the higher end of the rental scale and then offer some rent optimization incentives to get good tenants to move in. You can charge more in monthly rent, for example, if you’re willing to offer the first month free or include a few utilities in the rental amount. This will work in some markets, but not in others. So, make sure you do your research and your due diligence before you engage in pulling these rent levers. The other option is to price your home competitively; get a good stable tenant in place for the long term, and do everything you can to retain that renter.
Other Rental Property Pricing Factors
You can’t control everything about your price. You can offer incentives and optimize your rental rate, but you cannot control the amount of competition in the market. You cannot control what’s happening to the local economy or whether the market is being flooded with new rental properties against which it’s difficult to compete. Renting in the middle of winter will usually require a lower price than when you have a vacancy in warmer months. Be prepared for every eventuality.
Raising your Rental Amount
Stable tenants who stay in place can provide high long-term returns. You won’t have to worry about vacancy costs or turnover maintenance costs. You won’t have to market your property again or spend your own time showing it to prospective residents. There’s a lot to gain by keeping your rental price stable and giving your good tenants a reason to stay in place.
However, when it’s time to renew the lease, you may want to increase the rent and earn a little more. Perhaps your expenses have gone up and you need to cover the costs. Again, take a look at the market. If you raise your rent, will your tenants be likely to leave? Can they find better value in another property?
Deciding how to optimize your rent and when to increase the amount you collect is a personal decision that largely depends on your property, your tolerance for risk, and the tenants you’re hoping to attract and retain. But none of these things are as important or impactful as the strength and position of the Hamilton rental market.
We’d be happy to tell you more about what we think will work for your property. Please don’t hesitate to contact us at Spotted Properties.