It’s that time again – one of your renters is vacating their unit and you have to make the tough decision of picking a monthly rent for your property. This is a decision not to be taken lightly – if you pick a rent that is too low for the market, you could be leaving thousands of dollars on the table over the life of the lease. But if you aim too high, your unit could sit vacant longer, costing you money every day that it is empty. At MV Properties, we can walk you through the basics of hitting that sweet spot for market rent to maximize the value of your rental property.
Scope Out the Competition
In order to best understand the rental value of your property, you need to get familiar with the other properties your potential tenants may be checking out. Think like a renter; understanding the market comparables is the key to knowing how to price your unit.
Explore other available housing options in the building and nearby, checking popular rental websites such as Craigslist, Trulia, and Apartments.com. Make sure that when you are evaluating a comparable property, you make adjustments for special features that may be different than your property, such as better views or valuable amenities like off-street parking or a gym. Consider which special features may lure a renter to your property – especially your property has something that may be worth charging a little extra.
Call in the Experts
San Diego is a large area full of unique neighborhoods where the rental market can vary greatly from across a few miles. For example, the average rent in 2015 for San Diego County was $1,856 per unit, but if you narrow it down by neighborhood, rents ranged from an average of a whopping $3,334 in Del Mar Heights to a more reasonable $1,180 in Barrio Logan. An important key to pricing your rental property correctly is to tap into the knowledge and experience of a professional property manager.
At MV Properties, we know that understanding the demographics, history, and competing projects in a neighborhood can be crucial to pricing a rental property effectively. A neighborhood like the Downtown market is historically a luxury market that demands high rents, but a glut of new development in 2016 can constrain rents when new rental competition hits the market.
These factors can affect pockets of the neighborhood differently, sometimes changing from one building to the next. Having a knowledgeable, local representative will keep you aware of the fast-moving market and trends that can affect your property’s value.
Pricing Philosophy
Once you have a ballpark figure based on comparable units and an understanding of the market, you should consider your pricing philosophy. San Diego County is one of the tightest rental markets in the Country, with historical vacancy hovering around just three percent.
Because of limited options, rents have been rising steadily in the area, with rents increasing an average of 5.3% between 2014 and 2015 alone. As an owner, that gives you options to follow trends and raise your rents accordingly, or you can raise rents more slowly in order to attract and retain more stable, long term tenancy. Sometimes, demanding higher rents can beget more demanding tenants!
Let Us Help
Now that you understand the factors that affect market rents, call MV Properties at 888-686-1525 to help you reach your property management goals. From providing up-to-date and in-depth market knowledge to ensuring a smooth and stress-free transition between tenants, we can help maximize your rental investment. Ask a question anytime by emailing [email protected] and visit our website to learn more.
About Keegan
Keegan McNamara is the founder of MV Properties, a leading San Diego property management company offering the highest level of service in property management, maintenance, and leasing. His goal is to cultivate long-lasting relationships with his clients (property owners) and their tenants to provide an enjoyable leasing experience. Keegan holds a Masters in Business Administration from the Rady School of Management at UC San Diego and is a Principal at McNamara Ventures, a real estate development, and investment company focused on residential and mixed-use properties.