One of the hardest parts of being a landlord in Oklahoma City is deciding how to set your rental price. When it’s priced too high, you risk having a vacant property. When it’s priced too low, you risk losing out on significant profit.
So, how do you decide the rental price for your property? While there isn’t an exact science behind it, there are many factors to consider while calculating the price.
By the end of his article, you’ll have some more guidelines to make it easier to decide your rental price. Plus, you could even make even more profit with your next lease if you follow our advice!
1. The 2% Rule
Many landlords used to take advantage of the 2% rule in the past to decide their rental price. This rule states that the rental price should be set to 1-2% of the total value of the property.
While this may have worked twenty years ago, property values have skyrocketed recently. This means that the 2% rule will most likely be too high compared to the rest of the rentals available on the market.
This was a good rule to follow in theory, but now it should be used more as a guideline. Simply adjust the price according to the following factors we’re going to share.
2. Analyze Your Competitors
The real estate industry consists of many market analyses whether it’s to buy, sell, or rent a home. Deciding your rental price is no exception!
In order to come up with the perfect price for your rental, you have to be in line with the rest of the market. This means analyzing other rental properties available in the area.
You can do this through online listing websites for the best and fastest results. When analyzing competitors, make sure to stay in your area and choose properties that are very similar to yours.
The factors you should look for in comparable properties are the same number of bedrooms, bathrooms, similar square footage, and in the same area.
Don’t expect to find a property that matches yours exactly. You’ll then adjust your rental price based on your comps or comparable properties. We’ll discuss more about adjusting the price in the fifth point of this article.
3. Consider the Season
You may not be aware that the year’s season affects how much you should charge for rent. This is solely based on the fluctuation of demand.
There tend to be more renters in the spring and summer months, which creates a high demand for rental properties in Oklahoma City. So, you can raise your rental price because there may be more renters than there are rental properties available.
This means in the winter months, you won’t be able to hike up the price because there aren’t as many renters active in the market.
4. Avoid Relying Solely on Zillow
There are plenty of websites out there that claim to accurately calculate the right rental price of your property in Oklahoma City. Zillow is one of the most popular calculators used. However, it isn’t always accurate.
Oftentimes, the number this calculator spits out is much too high for the local market. While you should definitely use Zillow while conducting your market analysis, try to avoid relying on the rent calculator and simply use it as a guideline.
5. Don’t Ignore the Amenities
The amenities your rental property has to offer can make a major difference when it comes to deciding your rental price. There is a huge price distinction between a three-bedroom property with a patio and a pool than one without a patio and a pool.
Amenities that raise the price of your rental in Oklahoma City include:
- Washer and dryer
- Air conditioning
- Parking space
- Updated kitchen
- Updated bathrooms
- Outdoor space (balcony, patio, yard)
- High-tech security features
- Pool or jacuzzi
Keep in mind that these are just some of the amenities that play a part in deciding the price.
To increase your rental price even more, simply add additional amenities! Not only does it raise the property’s value, but your property better stands out from the rest of the market.
6. Test the Market
If you can afford to have a vacant property for a bit, take the opportunity to test the market. This means fluctuating the rental price based on the interest from tenants.
Set your price at the highest reasonable amount and see how many potential renters contact you. If there are only a couple, lower the price. The lower the price, the more interest you should receive.
If you price the property too low, you’ll have a ton of people contacting you because it’s such a great deal in the current market. While this means you’ll fill your vacancy quickly, you could be losing out on a good amount of profit.
7. Calculate Your Profit
Sometimes it’s easy to lose sight that owning a rental property in Oklahoma City is like running a business. While determining your rental’s price, you should add up your expected expenses each month.
The rent should be greater than the expenses you’re paying so you can make a profit each month. These expenses include any mortgage payments, utilities, property taxes, and maintenance fees.
8. Adjust to the Economy
Adjusting the rental price according to the state of the economy will also help you determine the right price.
In a bad economy, there are more renters in the market because they cannot afford to purchase a home. Therefore, demand for rental properties is high, which means you can raise the price.
However, in a good economy, more people will be buying homes, which means there are less renters in the market. So, you’ll need a lower rental price.
9. Get a Professional Opinion
One of the best things you can do when deciding your rental price in Oklahoma City is to get a real estate professional’s opinion.
A real estate agent or property manager is the best people to ask for this. They have access to professional resources, experience, and education to help them determine the right price.
In fact, when you work with a real estate professional to fill and even manage your property, you will notice an increase in your profits. This is mostly due to their vast resources, professionalism, and organization.
Real Property Management Resources Can Help You Determine Your Rental Rate
Getting a professional opinion on the rental rate for your property is just a phone call away!
Real Property Management Resources is the leading property management company in Oklahoma City. Not only will we help you decide your rental rate based on market analysis and experience, but we will also fully manage your rental property.
With our professional team members, impeccable organization, and our commitment to excellent customer service, you’ll see your rental income increase.
Are you ready to start making more profit from your Oklahoma City rental property? Give us a call and see how we can help you maximize your rental income today!
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