Classified among the biggest mistakes that new or do-it-yourself landlords in Milton make all the time is not knowing and understanding how to calculate a fair market rental rate for their property the correct way. Consequently, most rental property owners are under-or overestimating how much rent they could be asking for and losing money all month because of that. This is specifically true as rents continue to rise across the country. If you are not increasing your monthly rent to keep abreast with the market, you leave money on the table. Needless to say, understanding how to correctly raise rents, particularly when you have an occupied property, is primarily significant. Although there are lots of great advice on how to do it, the first and most necessary tool you have to know and make use of is the rental property assessment.
Fair Market Rent
The fair market rent of a property is the rate at which similar properties are renting for in your area. The market rent differs widely from place to place and additionally from one neighborhood to the next, so there are no shortcuts: you need specific and local numbers to calculate correctly.
For a Milton property, the most relevant piece of information you have to find is what other landlords in your place are charging their tenants. You, moreover, must look at comparable properties, or comps, to be certain that the other rental properties are the same in size and features as yours. To get this info, you’ll need to do a bit of detective work. Check out posted rentals in your locale and those advertised in local classifieds.
Or, get in touch with a Milton property management company such as Real Property Management Boston, which will have a wealth of information concerning the rental market. With at least three or more comps in hand, calculate the average monthly rent and compare your current rate with the answer. You now have the fair market rent for your property!
Regular Rental Property Assessment
Even while calculating the fair market rent is an essential initial step, it is only the first thing in keeping your rental property profitable. To maximize your monthly cash flows, it’s vital to re-calculate the fair market rent for your Milton property at least once a year, probably even more often, if rents are changing quickly. Over the years, a shortage of single-family rental homes has led to rapid increases in rental rates in countless markets across the country. If, lately, you have not accomplished a rental property assessment in your vicinity, the probabilities are your rent is too low, and you are missing out on income every month.
However, it’s not only about the money. There are various other explanations for why property owners are reluctant to raise their rent. Possibly you are anxious that raising your rent will make your rental property harder to lease. Countless landlords worry that if the rent is set at the going rate, their rental house won’t be competitive, and they’ll have trouble finding tenants. Or possibly you are worried about angering a current tenant, definitely if they have been renting from you for a while. Needless to say, if your rents haven’t changed for some years, there’s a good probability that your current tenant is paying a rental rate that is well below what everyone else is paying.
Professional Property Management Pays for Itself
It can be time-consuming and, let’s face it, a little nerve-wracking, to realize whether you are charging the correct amount in rent. Even after fulfilling your own market research, you may still have apprehensions as to raising your rent without losing your tenant. For all of these reasons, having a professional property management company assess your property and set your rental rate may be the alternative you’ve been searching for. Landlords occasionally hold back from hiring a property manager because of the cost. But really, if you are not charging the right amount of rent, you are already losing far more money than you’d pay someone to manage your property for you. By making certain you have an accurate rental rate and working attentively with your tenants, a professional property management company can aid you to increase your monthly income and, in the long run, pay for itself.
Would you like to know more about what a professional property management company has to offer? Contact us online today or give us a call at 617-522-0099.
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