Today we are talking about how to determine the appropriate rent level for your investment property. It always starts with research.
Any time a vacancy comes up, you need to look online to see what other properties are renting for. Check the comps in the immediate vicinity and the neighborhood. If you own a condo, check the units in that same building with the same floor plan as your unit. Compare the views of your unit with the other units. When you’re comparing different properties and their rental prices, look at the different levels of amenities. Think about what your property offers that competing properties might not.
Experience also helps you price your rental property correctly. At MV Properties, we manage rental homes all over San Diego County and in diverse submarkets. Rents are dramatically different in the beach communities, where prices are the highest in San Diego and among the highest in the entire country, as compared to areas inland. Downtown is a complex submarket, where a lot of new, luxurious buildings have recently been built or are under construction. These new buildings impact the supply side of the rental market, and conditions can vary, just from one building to the next. In the core or mid-city neighborhoods, different factors will affect how much a studio, one bedroom or two bedrooms will rent for. The key is keeping up on these latest trends.
San Diego County is one of the tightest rental markets in the country. Countywide, our vacancy rate is at three percent. Historically, rents go up an average of five percent per year, and recently it has been even higher. So depending on your philosophy as an owner, you have options when it comes to setting a price on your property. If you want to be at the head of the market, follow those trends and raise your rent accordingly. If you prefer to have long term stable tenants and you don’t need to be at the top of where rents are, that requires a different approach when it comes to pricing your rental home.
Whatever your philosophy is, you need to keep up on trends. If you’re ready to hire a property manager to do that for you, please contact us at MV Properties, and we’d be happy to serve as your local property management solution.