30 Oct Turning Your Rental Property Into A Wise Investment Starts With The Correct Pricing
Three, two, one…Boom!
How are you all doing today?
Are you renting out your house?
Or maybe toying with the idea?
It’s a good investment when you’re opposed to selling your property because your tenant could help you take care of your mortgage quickly. But hey, there’s one problem that deters you from sealing the deal with your potential tenant-the rental price!
It’s all too common. It’s either your price is too high or too low. You just can’t decide what the reasonable price is. Before we find out how much is considered as an acceptable rental price, let’s first determine the factors you need to take into account when renting out your home.
Some Important Considerations
Selling your property takes time. One reason it’s tough to get rid of your property is that your asking price does not meet your potential buyer’s budget. Or it could also be that the home listing is not visible. Don’t lose hope. You can rent out your property in no time. It’s a viable option, but you still need to make sure that you have responsible tenants. You surely have heard horror stories about tenants not paying rent. They’re the tenants from hell.
Even if it’s only temporary and no matter how responsible your tenants are, the normal wear and tear in your home are inevitable. The problem is, the damage can affect the value of your property. Of course, you’ll also have to be ready at all times just in case your tenants need emergency fixes such as repairing a clogged toilet.
It’s financially risky. All investments are! You just need to be prepared for the setback. So if you’re ready to rent out your home, then the next step is to determine how much you should charge for rent.
What’s the price of your rental property?
If you’re not sure how much rent to charge, start by determining the current worth of your property in the market. Don’t rely on the price you originally paid for your property because the market price could be different. You might also want to find a home appraiser. They’re more skilled in assessing your home’s actual value. The location, condition of your home and the local home sale prices affect your home’s value.
So once you have determined the market value of your home, the rental should be a percentage of its value. The percentage may be between 0.8% and 1.1%. Let’s say your home’s market value is at $400,000. You could charge between $3600 and $4950. The rule of thumb is that expensive homes should charge less rent to attract more potential buyers. Why? If your rent is too pricey, you may have trouble closing the deal as many people find your home unaffordable.
It might be best if you check how much other landlords are charging. It’s one way to know whether or not your rate is unreasonable. What if you’re renting out your house to cover the cost of your mortgage bill? Well, you may need to factor in the taxes, insurance, association fees, and the repair costs. And oh, avoid choosing whatever rental price you want. You’ll still have to keep the rent control law into consideration.
Do you have further financial questions? I can definitely help you. Whether it has to do with turning your property into a wise investment or about achieving your financial goals, I have the answers for you. Simply follow this link to my site to get started.