10 Apr 2025
News
How to Set the Right Rental Price for Your Investment Property
Setting the right rental price for your investment property can be a challenging task, however it is crucial for maximizing your returns whilst attracting and retaining reliable tenants. Setting a price too high may deter renters and cut your pool of potential tenants, whilst pricing too low can cut into your profits. Read below for tips to strike the right balance when determining rental rates.
Research the Local Rental Market
The local rental market is a great indicator of the price range your property should fall in. Looking at comparable properties in the area can help you set a benchmark for your property. When looking at other properties it is important to consider factors such as:
- Location
- Number of bedrooms
- Number of bathrooms
- Property age
- Amenities offered
Using online tools such as Zillow, are great resources to look for other similar properties and gauge pricing.
Factor in Expenses
Factoring in all your expenses related to the property can help landlords determine the minimum rental price needed to break even. When calculating your expenses, it is important to consider factors such as:
- Mortgage payments
- Property taxes
- Insurance
- Maintenance and repairs
- Utilities (if applicable)
Setting aside a portion of rental income for unexpected expenses and vacancies can also be a prudent move to protect yourself in the future.
Consider Your Property’s Unique Features/Amenities
Whilst the market and your expenses can give you a good idea about the right price to list your property, it is important to consider any unique features or amenities of your property, that may justify charging a higher rent. Factors that should be considered include:
- Renovated areas
- Swimming pools
- Fitness rooms
- Unique layouts
- Concierge
Tenants may weigh the benefits of these factors when assessing the price they are willing to rent the property for.
Offer Incentives Instead of Lowering Rent
If you are struggling to find tenants at your set rent price, consider offering additional incentives for prospective tenants, instead of immediately lowering the rent. You can make your property more attractive through offers like:
- Move-in bonus (e.g., discount on first months rent)
- Flexible lease terms – to attract different types of tenants
- Including utilities
Review & Reassess Regularly
Rental markets can constantly fluctuate, so periodically reviewing and reassessing your pricing strategy is crucial to keeping your property competitive. It is always a great idea to stay informed about market trends, competitor pricing, and tenant demand.
Virani RENT & MANAGE is a property management company dedicated to rental and property management. We manage all the aspects of the management of our clients’ rental properties. Contact us if you have a property that requires management.
