One of the biggest obstacles to maximizing your rental profit as a landlord is vacancy. Obviously, if your unit is sitting empty without a tenant, you aren’t making any money. As the economy continues to improve, more and more people are becoming homeowners. This means that fewer people are renting, but it also means that rental rates are continuing to rise as new homes command a premium. Your unit may be occupied now, but preventing vacancy is an issue that every landlord should be concerned with all the time; at some point, every tenant will move out. In the meantime, you should ensure that you are charging fair rent. Setting the rent is walking a fine line. You want to keep the rent low enough that you can attract a tenant quickly, but you don’t want to set it too low and sacrifice potential income. On the other hand, if you set the rent too high, the unit could sit empty for months while you try to find a tenant. You can prevent vacancy of your unit and ensure maximum rental profits by following these five tips for maximizing your rental profit in part one of this series.
Price the Unit Competitively

Many landlords are tempted to price the unit low out of a fear that the unit will sit empty. They would rather get a tenant in the unit and start collecting some rent than price it too high and not collect any rent for some time. You should be careful not to set the rent too high, but you also should be careful that you are not missing out on potential rental income.

There are several factors that influence rental pricing. The first and most important factor is location. It is no secret that people are willing to pay more for a rental unit that is in a great location. If your rental is located right in the heart of the city, you can charge significantly more. However, if your rental is located a ways out of town, then your rental rate should be lower.

The second factor that influences pricing is the condition of the unit. The unit should be in good condition, of course, with no obvious signs of wear and tear. Everything should be in good working order. Beyond that, though, is the issue of the décor. Renters will pay more for a unit that has updated décor, regardless of whether that affects the functionality of the unit. Those old, ugly kitchen cabinets may open and close and hold dishes, but if they are avocado green from the 1970s, nobody will want to pay very much to live there. You can maximize the rental income for your property by maintaining an updated, modern décor that is in good working condition.

Before you set a rental price for your unit, check out the competition. Your unit must be competitive with the other units that are available for rent. Check out listings on sites like Zillow and Craigslist to get an idea of current rental prices in your area. This will give you a good indication of how your unit should be priced.

If you own a rental property, contact McMath Realty, Phoenix rental management company. We will help you to determine how much rent you should be charging for your unit so that you can maximize your rental profits. For more information on maximizing your rental profits, contact McMath Realty Services and read part two of this series.

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