One of the biggest mistakes that newbies or do-it-yourself landlords in Plano usually make is not really knowing how to calculate a fair market rental rate for their property accurately. Because of that, many rental property owners are under-or overestimating how much rent they could be asking for and losing money monthly, consequently. This is precisely true as rents continue to rise across the country. If you are not increasing your monthly rent to meet the market, you leave money on the table. Without a doubt, really knowing how to correctly raise rents, particularly when you have an occupied property, is really very important. Despite that there are lots of great recommendations on how to do it, the first and most essential tool you must have and use is the rental property assessment.
Fair Market Rent
The fair market rent of a property is the rate at which similar properties are renting for in your area. The market rent deviates usually from place to place and also from one neighborhood to the next, so there are no shortcuts: you need specific and local numbers to calculate correctly.
For a Plano property, the most significant piece of information you need to start is what other landlords in your vicinity are charging their tenants. You, additionally, should look at comparable properties, or comps, to make absolutely sure that the other rental properties are comparable in size and features to yours. To get this relevant information, you’ll need to do some detective work. Check out posted rentals in your zone and those advertised in local classifieds.
Or, talk to a Plano property management company like, for instance, Real Property Management Legend, who will have a wealth of information regarding the rental market. With at least three or more comps on hand, calculate the average monthly rent and compare your current rate with the result. You now have the fair market rent for your property!
Regular Rental Property Assessment
Though calculating the fair market rent is an appropriate first action, it is only the preliminary step in keeping your rental property profitable. To maximize your monthly cash flows, it’s significant to re-calculate the fair market rent for your Plano property at least once a year, definitely even more often, if rents are changing very quickly. In recent years, a shortage of single-family rental homes has led to rapid increases in rental rates in quite a lot of markets across the country. If you have not currently done a rental property assessment in your neighborhood, the potentialities are your rent is too low, and you are missing out on income every month.
With that said, it’s not only about the money. There are countless other very solid reasons why property owners balk at raising their rent. Most likely you are nervous that raising your rent will make your rental property harder to lease. Quite a lot of landlords are concerned that if the rent is set at the going rate, their rental house won’t be competitive, and they’ll have trouble finding tenants. Or most likely you are concerned about angering a current tenant, especially if they have been renting from you for a while. Certainly, if your rents haven’t changed for various years, there’s a definite likelihood that your current tenant is paying a rental rate that is well below what everyone else is paying.
Professional Property Management Pays for Itself
It can be time-consuming and, let’s face it, a little bit nerve-wracking, to be aware of whether or not you are charging the correct amount in rent. Even after executing your own market research, you may still have worries with respect to raising your rent without losing your tenant. For all of these reasons, having a professional property management company assess your property and set your rental rate may be the perfect choice you’ve been looking for. Landlords often hesitate with hiring a property manager because of the cost. But as a matter of fact, if you are not charging the right amount of rent, you are already losing far more money than you’d pay someone to manage your property for you. By seeing to it that you have an accurate rental rate and working meticulously with your tenants, a professional property management company can definitely help you increase your monthly income and, in due course, pay for itself.
Would you like to know more about what a professional property management company has to offer? Contact us online today or give us a call at 214-227-2404.
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