Before I ever bought a property, I thought that my landlords set the rent through some type of irrefutable science. I never questioned how they came up with the numbers. I took it as a given: The sky is blue, the grass is green so why can the rental not be as set?
Well today as a landlady today, I now know that pricing your rentals starts with the demand for your property, then your research on rentals for the area and of course the biggest of all; guesswork. Look at its position, fixtures, layout, land size, stand size, view, amenities. To me and many other property owners, these variables make figuring out the ideal rental price an art, rather than a strict formula.
Here are some of the ways I determine the rental prices for my units. (Hint: It’s a lot of trial-and-error!)
- property24 and Private Property are my best friend when I’m buying a new property or renewing a lease. All I do is to set the search criteria, such as the number of bedrooms, position and size and search using keywords that anyone looking for a rental in your neighborhood would use. “4-bedroom in Bramley.” In this case, it is also easy and cheap way for me to see what the competition is charging. Lately I’ve been further narrowing my search through more specific keyword phrases like “walking distance to X” or “rent includes water and electricity”.
- Signs! Land signs and the quality of the properties are one of the most underrated ways to scout a neighborhood. Most will list only basic information: the number of bedrooms and bathrooms, the rent, and a phone number. You won’t see pictures of the interior, but a glance at the exterior will give you a generally decent idea of the property’s condition. Even the lifestyle of neighbours can help
- Market Demand / Seasonality. I’ll admit, I charge higher prices for vacancies that come on the market during the months of March through August, when there’s lots of turnover in most area. I’ll ask for a lower sticker price in December, when most migrant workers and students could be traveling not to come back in most cases.
- Renovations or Say Updates. Ah, the four words that will make a listing shine: “Electric Fencing and CCTV.” As a general rule, I’ll raise the rent by R500 per month or more as compared to a similar.
- Moving Target. I’ve occasionally asked for rent that was too far off base, but I learned my lesson quickly when no one responded to my adverts. At the same time, I priced too low, and regretted when it was too late. Actually I still regret now because tenant is still in and I cannot just increase their rental without breaking the law
- Tomb of rule. All I can say at this point that in some regards, the rent is a moving target, a trial-and-error experiment. As such, all I do is to test a price for a few days, and adjust it based on the feedback.
You can join the conversation. How do you set the rent?