Raising The Rent - Park City Property Management
As a landlord in Park City property management you have undoubtedly contemplated the prospect of raising the rent on your current tenants. Perhaps you are in a negative cash flow perspective on your investment property and looking to get positive. Or maybe you feel the market has turned and a higher rate would keep you competitive. There are many things to consider before raising a rental rate so let's take some time to discuss a few of the more important points.
Availability
Is your rental property one of several in the area that are consistent rental properties, vacant or otherwise? Knowing how many rentals there are in your area is one of the first things you should determine when considering raising the rent. If your property is one of many and there are a fair amount of vacancies you run the risk of losing tenants. If your tenants are problem tenants you may want them to move however be careful because you could get yourself into trouble. I discussed this issue previous in a post titled "Landlord Retaliation - Park City Property Management" which you can read by clicking here.
Market Rate
Do you even know what the market rate is for your property? How do you determine market rate? The best answer on market rate is the rental rate that a willing landlord and tenant agree to. As a landlord however, you are looking to maximize your return on investment so you must position yourself in the marketplace accordingly. Doing your homework on what rental properties in your area are listed at and how comparable they are to your property is the first step towards determining market rate.
Quality Tenants
The old adage "A bird in the hand is worth two in the bush" perfectly describes the value of a quality tenant. Is an extra $25/month worth it when your current tenant takes excellent care of the property, always pays rent on time, is wonderful to work with when maintenance requests occur, and generally is a great person to deal with? Quality tenants are not always easy to come by and if you have one they are a great asset to your Park City property management operation. If a small increase is enough to drive them out then forego the money and keep your peace of mind. It is far better to make a little less a month and have a property returned in equal, if not better, condition at the end of a lease.
Rental Demand
How is the demand for rental units in your area? Are there factors in play that could increase or decrease the demand for your property? For example some recent openings of large luxury hotels have had a favorable impact on rental values for Park City property management. On the other hand the addition of government subsidized housing has eaten up some of the bottom of the market. Pay attention to what the market in your area is doing. Are there new schools being opened or new business or development plans? What about a large employer going out of business? These factors have substantial impact on both property and rental values. If people are clamoring to rent in your area then rents go up. If you struggle to find tenants then consider keeping your rates static or even incentivizing to keep good tenants in place.
If you would like more information on rental pricing, market evaluation, or Park City property management please click the link below and schedule a free consultation. You will receive valuable information specific to your rental property along with a no-obligation quote on our property management services.
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