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Whether you’re just getting started with rental properties or are a seasoned pro moving to a new zip code, choosing the right rent is the key to your success as a landlord. After all, you want it to be high enough to make a return on investment while competitive enough to attract potential renters.

So how can you ensure you set the rent price high enough to pay expenses and maintain a positive income flow, while still being low enough to bring in potential tenants?

Research Competition

Regardless of the location of your current or potential rental, it’s important to take a step back and understand how the neighborhood fits within the larger town or city. Take a stroll around and take note of who currently lives there and what the area offers.

Is your rental property close to amenities like nightlife, grocery store, and a laundromat? Is it in the beginning processes of gentrification or is the area already established as a “hip” neighborhood? Does it have parking or is it near public transportation? What about schools?Once you have a solid grasp of your location you can start looking at single-family units or apartments that offer similar features. See how your property stacks up against others in the area.

Maybe all apartments in the area provide a washer/dryer in unit. If you don’t, you may not be able to charge the same price.

You should also keep an eye out on what actual tenants are saying. Maybe they want more pet-friendly apartments or energy efficient buildings. If hardly any other properties offer this, it might be a good idea to invest.

Only do so if you believe you can charge a premium for these features and still maintain a profit.

Consider Your Timing

So many people state that the three most important aspects of real estate are location, location and location.

While location certainly is important, you can’t underestimate the power of timing. Even as a tenant, you’ve probably noticed during summer months rent tends to be higher. Why is this? There are several reasons:

  1. College students are on summer break and need a place to stay once the dorms have closed.
  2. People tend to move during summer months due to better weather. No one wants to move when it’s snowy or cold.
  3. It doesn’t disrupt children’s schooling. Moving in the middle of the year is never fun for kids.

As you would expect, with higher demand comes higher prices. Renters are more willing to pay higher prices as they don’t want to miss out on their dream apartment. And since there are so many people looking for a place to stay, you have more control over pricing.

Conversely, renters are less willing to pay higher prices in the winter. So, if your contract ends in the winter months, it might be a good idea to negotiate a 3 to 6-month extension so that you can then move them to a summer rental cycle.

Fill the Property Quickly

Many people tend to be wary of listings that have been vacant for longer than a week, especially during high demand seasons.

Not only will your listing drop in relevance for each day you’re in the classifieds, but potential tenants will question why the rental is still on the market. And if you take it off and re-list, many will view this as a sign of a problem.

While you don’t want to rush finding a tenant – after all you want someone who won’t trash the place – you also don’t want to wait forever for the “perfect” candidate.

To avoid a long vacancy, start the search as soon as possible. If it’s still occupied, contact existing tenants a few months before the lease expires to see if they want to renew.

Should they decide against it, you can start showing off the rental 60 days before the lease expires. This gives you plenty of time to conduct some research, go through applicants and find the right person.

Setting the Price

You can take your research from the first step and apply it when setting the price. Sites like Zillow offer you excellent information on the median price range of the neighborhood as well as the approximate value of the properties you own.

However, the median price might not necessarily be the best fit especially if you’ve spent quite a bit purchasing the property and fixing it up.

Once you do set the price, remember that it isn’t static. You must adjust your prices based on demand. A coveted neighborhood might suddenly drop in demand due to another area attracting more amenities at lower prices. In order to compete, you’ll have to consider adjusting your prices next cycle.

Always keep an eye out on the market and potential fluctuations in order to stay ahead of the curve. This way, you’ll ensure your rental properties will continue to be filled and make you money.