How Much You Should Charge for Your Apartment
What to charge for your apartment can be complex. There are many factors to consider. Some landlords use the 2% rule, which means monthly rent should be about 1-2% of the property’s value. However, this is just an estimate and there are other factors to consider.
Know your competition
In most of the larger rental markets, rent costs continue to rise yearly. This is good news. However, before setting your rental rate, it’s important to take a look at what other landlords in your area are charging. Do your research, compare similar units, size, bedrooms, baths and price accordingly.
Amenities can increase what you charge for rent. However, do some research to see what amenities are hot in your area. Typically, pools, fitness center, on-site parking, washer, dryer in unit and dishwasher are big selling points.
Keep in mind, adding additional amenities can create additional maintenance issues. It’s important to get appliances well rated for renters. Paying attention to the effect of these amenities is especially important whenever you cannot find any properties that have the exact amenities that yours does.
Among all the factors, location is number one. Given the ease of apartment hunting, it’s important to think about why location matters to a renter so that they stand out from other properties in the area. Renters consider an area’s cost of living and its proximity to their workplace before they sign on the dotted line. In addition, renters want to feel at-home where they live and be part of a community, and thus often rent in areas that fit their personality and lifestyle. If an apartment is located in a city’s most posh area, you can expect the prices to be much higher in comparison to other nearby cities. On the other hand, if a similar kind of apartment is located in a less-popular area, rent prices are likely to be lower. Thus, New York apartments rent out for twice as much as apartments in Inwood.
The time of year can affect rent prices. As you would expect, rental property is highest during the spring and summer and tends to plateau during the winter seasons. This is due to obvious reasons, as most renters prefer not to move during the colder months and many don’t want to disrupt their children’s school year. What this means to you as a landlord, there are fewer prospective renters looking to move during the winter season, then your rental property may stay vacant longer. Landlords might opt to offer a lower rent price during the winter season to avoid facing the risk of a vacant rental property.