When you are setting a rental price for your Central Indiana income property, it’s important to look at what to do and what not to do as a landlord.
Do have a rental market analysis done on your property. This will show you what similar properties in similar areas with similar features are on the market at the same time. You’ll get a look at your competition, and you’ll have an idea of what the rental prices are on those homes.
Do Not factor in your mortgage. The amount you pay every month for your mortgage, taxes and insurance does not matter to your tenants or the market. It doesn’t matter how much cash flow you’re hoping to earn. Market factors will be far more important to the price of your rent than what you owe on your mortgage.
Do listen to market feedback. Once you set your price and you advertise your property, you’ll start to get phone calls. Pay attention to volume. If the volume of phone calls and emails isn’t high, it could be because you set your price too high. If you get a lot of initial phone calls and communication, but then those people choose not to fill out an application after seeing the property or hearing about its details, that’s also an indication that you might be asking too much.
Do Not listen to neighbors. They might be experts in just about everything, but they probably aren’t experts on this. Neighbors might want homes in the community to rent for a lot more than they actually will. They tend to be overly optimistic.
Do Not be emotional about what your home rents for. Every five weeks that your house sits vacant, you are robbed of 10 percent of your annual rental income. That hurts your bottom line. Think about your income property as a business and look at the data that supports what kind of rent is appropriate for your house.
This is just a quick list of what you should and should not do when you’re setting a rental price for your home. If you’d like more information, or if we can help you establish a fair price for your own investment property, please contact us at Indiana Property Management Group.