Rental properties can be a great way to generate income, but if you don't handle things correctly, you could face various issues.
Many landlords make mistakes when it comes to rental valuation. Some of these are very common and can have a sizable impact on your profits. A qualified property manager can help you navigate the real estate market and stay on track toward your goals.
Let's go over some myths about rental property pricing in Westminster, CO, so you can get things right.
1. You Can Set Rent Prices as High As You Want
This is one of the biggest myths landlords fall victim to. Theoretically, it's actually true. The problem is, if you set your rental pricing too high, you'll find it impossible to make any money.
You need to set a suitable rental value in line with other properties in your area. If you try asking for too much, no one will want to rent your property and it will simply sit vacant.
Conversely, setting it too low will make it easier to find tenants, but you won't be maximizing your profits. A professional property manager can help you determine a suitable rental price for any property you own.
2. You Can Change Rental Prices at Any Time
You can change rental prices, but not at any time you choose. When a tenant moves in and signs a lease, you've made an agreement. This dictates how much their rent will be for the duration of their lease.
Depending on the details of the lease, it may be possible to increase the rent after a certain period, so long as there hasn't already been an increase within a specific timeframe.
If there's a period of vacancy, you can then change the rental price. Just bear in mind a sizable increase could make it far more difficult to find tenants.
3. You Should Set Rent in Relation to Expected Inflation
Inflation and rent sometimes correlate. If inflation is high, you might want to set a higher rental price.
There are many other factors, however, that affect rental pricing. Setting it based on expected inflation can easily lead to under- or over-pricing. This can lead to issues for both landlords and tenants.
4. Landlords Know the Rental Value of Their Property Best
It's common for landlords to think they know their property (and therefore the rental value) better than anyone. In reality, however, most landlords don't know how to suitably value a property, and they can easily get it too high or too low.
Professional property managers know how to determine a suitable rental value. They do this based on the property itself as well as the local real estate market. Hiring a property manager to help you with this can result in you maximizing your rental income.
Professional Rental Valuation for Your Property
Setting the right rent price is one of the best ways to maximize your income from a property. A professional property manager can help you do this through a reliable rental valuation.
PMI Mile High is a full-service real estate asset management company serving Westminster and the surrounding communities. We work under the PMI brand, the fastest-growing property management company in the US. Take a look at our property management page to find out more about how we can help.
