Whether you are renting a home for the first time or are in the process of negotiating a rental renewal for an existing property, pricing your rental for quick occupancy is vital to your success as a property manager. You don’t want to price it too low and miss out on putting more money in the bank and you don’t want to price it too high so that it sits unrented.

To get to that “Goldilocks” number (not too high, not too low, but just right), here are 8 questions to ask yourself before writing up your lease. Keeping your rental property filled with great tenants who pay a fair market value (or a little better) doesn’t need to be a fairytale.

1. How Do You Figure Out the Best Rent?

A starting point is to comp the property relative to the current market in the surrounding area, considering the particulars of the rental home, such as the condition of the property, interior finishes, the neighborhood, community amenities, etc. After taking all these factors into consideration, you should price yourself somewhere in line with comparable rental units.

2. What if My House is Better than the Ones Around it?

Maybe you’ve installed lots of upgrades, had the property professionally landscaped, new wall-to-wall carpet installed, and the amenities are too long to list. Shouldn’t you charge a higher rent? After all, you’ve spent a lot of money making your rental property better than the others. While that may be a perfectly logical way to think, it comes with some challenges.

For one, if your home is the best on the block, what properties can you compare it against? If you have to go outside of the neighborhood to find a similar product, you’re no longer comparing apples to apples.

The second challenge (and many property managers have a hard time understanding this) is that the market is the market. What we mean by that is while you should probably aim for the top end of the market, many property managers think they deserve more. When you’ve put blood, sweat and money into upgrading a rental home, there’s a tendency to overprice the home based on emotion. Remember, taste is subjective and rental property management is a business. So keep emotions in check.

3. Should I Always Try to Get the Most Rent I Can?

Why not try to get the best, highest rent possible? It makes perfect business sense, right? The short answer is that you might find you’ve overpriced the rental home for the market. One of the things a lot of landlords don't always take into account is how much an unrented home is costing. Getting the top dollar, if it means the unit sits empty, is not always the best strategic move.

Consider this. Let’s say you’ve got a great home, the best in the area that should command a rent of $1,595.00, $100.00 more than the immediate market's $1,495.00. You might run into some blockades if you want to lease that home quickly but you’re overpriced for the market. Overvalued rental properties often remain on the market and experience extended vacancy periods.

What you need to look at is how much revenue you’re losing by keeping the home vacant versus how much you’d be putting in your pocket if it were rented. For instance, if you drop the rent by $50.00 a month but can lease the home in five days rather than five months, over the course of the lease (typically 12 months), you’re way ahead. The economic loss is considerably more when left unrented for 5 out of the 12 months.

4. What Can an Owner Do to Increase the Rent They Can Get for Their House?

What if you rented the home for less than you wanted in order to get the home occupied? Is there anything you can do to increase the rent? The great thing about rentals is that you’re only limited to this rental amount for the term of the lease which is usually twelve months. If you did make a mistake in pricing the rent, in twelve months when you renew the lease, you have an opportunity to correct the mistake.

As you increase rent over time you’re also reducing your mortgage debt. At some point (depending on your financial situation) the rent should begin to cover the monthly mortgage expense—hopefully with a little cream on top for you.

5. What Are the Common Mistakes People Make in This Area?

We talked a little about this earlier, but it warrants repeating. In the real estate world, the improvements in your house are going to affect how fast your house rents more so than how much it will rent for.

The new kitchen remodel means your house will rent faster. The best house on the block will rent faster, not necessarily rent for more. This is especially true in an area where the properties are so similar in nature and where there’s not much uniqueness. When most of the rental homes are pretty much the same (i.e. they’ve all got remodeled kitchens with stainless steel appliances and granite countertops), there’s nothing special to make one property stand out from the rest. Theoretically, special upgrades mean that you should be able to lease your home faster, but you're not necessarily always going to get an increase in value for doing that work.

6. How Does Haven Homes Determine Rents?

At Haven Homes, we examine the market as well as objectively consider the home. We ask ourselves questions. What are the property’s strengths and weaknesses? What similar properties are there close to that home? If there aren’t any, how far do I have to travel to find a similar property? And once I do, how much is the rent? Is there anything special or different about the location of that property when compared to our property?

Here’s what we mean. You own the nicest home in a “not so great” neighborhood. You found a similar home, but it’s a mile away from your home. The other neighborhood is far superior to yours so we need to build in a discount. We use all of those different data points to triangulate what the best rent is in order to lease the home quickly and at the best possible rate.

7. How is this Different than Other Property Managers?

Haven Homes is singularly focused on the single family rental business. This focus allows us to be leading edge in technology, process, communication and management services, of which all are essential to securing the best rent as quickly as possible. We are invested in your success.

8. How is this Different than What I Can Do for Myself?

As an individual property manager, there are many things that you just can’t do as well as an experienced team that is dedicated to providing quality rental management services to property owners, with a specialization in particular geographical regions. At Haven Homes, we know the Las Vegas, Nevada region extremely well.

Our team is solely focused on the management of single family properties in close-knit communities across Las Vegas. We are familiar with the rental and leasing laws, know the properties in the area and understand the market. Simply put: it’s what we do.