Your property’s rental value depends on a number of things, including location and condition and amenities. One of the most important factors that will influence what you can charge, however, is the local rental market. What you can charge for rent in Chapel Hill may be dramatically different from what you can charge for rent in Durham. The market drives prices, and most rental markets are hyper-local, meaning it doesn’t matter what the “average” rent is in the state or even in the county.
We understand that pricing a Chapel Hill rental property can be stressful. You probably have a number in mind that you want to earn every month in order to cover mortgage payments, insurance, taxes, and other expenses. But, you have to be strategic and you have to be correct. Otherwise, you’ll have a long vacancy period, and that’s going to be expensive.
Here’s how to find the right rental price.
Chapel Hill Rental Market and Rental Value
There are some things you can do to influence what you charge, and we’ll talk about those in a minute. First, you need to understand that property owners and property managers do not ultimately set the rent. This is set by the market.
Maybe you want to earn $2,000 a month on your rental property because that’s the threshold you need to meet in order to earn positive cash flow. Great, but if everything else that’s similar to your property is only renting for $1,500 a month, you’ll have to have something really special to offer if you want to find a tenant who is willing to pay $500 more than what the market demands.
To accurately price your home, it’s important to analyze rental market data carefully. Study what similar homes have rented for in your neighborhood. Remember that things change quickly and you need to access recent, reliable numbers. Maybe a home rented for $1,250 last month. A similar home next month may rent for $1,500. It really depends on what’s happening in the local market and economically.
Checking the Multiple Listing Service (MLS) is another important tool that tells us how the market is trending. We can see actual prices that homes have rented for. It also shows us how many days the property was on the market, which helps us manage the initial property pricing.
Consider Your Location and Property Condition
The market won’t be the only thing that impacts your rental price. Location plays a key role as well. Good tenants want good neighborhoods. Properties close to shopping, restaurants, entertainment, and commuter routes will always rent for more than those that are in remote neighborhoods or in a commercial district.
Property condition is one part of the pricing process over which you have complete control. By improving the appeal of your rental home, you’ll set a competitive and profitable rental price. Tenants are willing to pay more for well-maintained, attractive homes. If you are renting out a property that’s well-landscaped, freshly painted, and updated with energy efficient appliances, fresh paint, and new floors, you’ll have no trouble pricing that home a bit higher. On the other hand, a property that’s old, deteriorating, and in major need of updates and improvements will have a lower rental price.
As professional real estate and property management experts, we keep up with the market trends. We have access to the latest data. If you need some help pricing your rental property, contact us at Real Estate Experts. We specialize in Chapel Hill property management and we also serve communities in Durham, Mebane, Hillsborough, North Chatham County, and Terri.